TY  - JOUR
AU  - Fullerton,Don
AU  - West,Sarah
TI  - Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7059
PY  - 1999
Y2  - March 1999
UR  - http://www.nber.org/papers/w7059
L1  - http://www.nber.org/papers/w7059.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu

Sarah West
Dept. of Economics
Macalester College
1600 Grand Ave.
St. Paul, MN 55105
E-Mail: wests@macalester.edu
AB  - A tax on vehicle emissions can efficiently induce all of the cheapest forms of abatement.  Consumers could drive less, buy a smaller car with better gas mileage, use cleaner gasoline, and repair pollution control equipment (PCE).  However, the technology is not yet available to measure and tax each car's total emissions.  We thus investigate alternative instruments. In a simple model with identical consumers, we show conditions under which the same efficiency can be attained by the combination of a tax on gas, a tax on engine size , and a subsidy to PCE.  In a model with heterogeneous consumers, the same efficiency can again be obtained, but only if each person's gasoline tax rate can be made to depend on the characteristics of the car.  We solve for these first-best tax rates.  Assuming that tax rates must be uniform across consumers, we then characterize second-best tax rates on gasoline and on characteristics.
ER  -