Institutional Affiliation: University of California Santa Cruz
|Do the Laws of Tax Incidence Hold? Point of Collection and the Pass-through of State Diesel Taxes|
with , , : w19410
The canonical theory of taxation holds that the incidence of a tax is independent of the side of the market which is responsible for remitting the tax to the government. However, this prediction does not survive in certain circumstances, for example when the ability to evade taxes differs across economic agents. In this paper, we estimate in the context of state diesel fuel taxes how the incidence of a quantity tax depends on the point of tax collection, where the level of the supply chain responsible for remitting the tax varies across states and over time. Our results indicate that moving the point of tax collection from the retail station to higher in the supply chain substantially raises the pass-through of diesel taxes to the retail price. Furthermore, tax revenues respond positively ...
Published: Kopczuk, Wojciech, Justin Marion, Erich Muehlegger, and Joel Slemrod. 2016. "Does Tax-Collection Invariance Hold? Evasion and the Pass-Through of State Diesel Taxes." American Economic Journal: Economic Policy, 8(2): 251-86. citation courtesy of
|Fuel Tax Incidence and Supply Conditions|
with : w16863
The incidence of taxes on consumers and producers plays a central role in evaluating energy tax policy, yet the literature testing the main predictions of the tax incidence model is sparse. In this paper, we examine the pass-through rate of state gasoline and diesel taxes to retail prices, and importantly we estimate the dependence of pass-through on factors constraining the gasoline and diesel supply chains. We consider several factors that alter the elasticity of supply, including within state heterogeneity in gasoline content requirements, refinery capacity utilization, inventory constraints, and variation in the demand for untaxed uses of diesel. In general, we find that in periods of time when the supply chain is constrained, and the constraint is plausibly unrelated to shifts in dem...