Lifetime Incidence and the Distributional Burden of Excise Taxes
This implies that low-income households in one year have some chance of being higher-income households in other years, and significantly affects the estimated distributional burden of excise taxes. This paper shows that household expenditures on gasoline, alcohol, and tobacco as a share of total consumption (a proxy for lifetime income) are much more equally distributed than expenditures as a share of annual income. From a longer-horizon perspective, excise taxes on these goods are therefore much less regressive than standard analyses suggest.
The American Economic Review, Vol. 79, No. 2, pp. 325-330, (May 1989). citation courtesy of