Excise Taxes with Multiproduct Transactions

Excise Taxes: Economics, Politics, and Psychology *

The imposition of taxes on specific consumption goods and services (i.e. excise taxes) not only is a time-honoured activity but also makes common sense: government financing can be combined with other important social goals, in particular the reduction of externalities (costs imposed on other people) by making the taxed goods more expensive. Thus two goals can be attained at the same time, whic...

Excise Taxes, Consumer Demand, Over-Shifting, and Tax Revenue

The effects of excise taxes and regulations on cigarette smoking.

We estimate a generalized linear model to examine adult and teenage cigarette demand. Out analysis focuses on the extent to which excise taxes and regulations restricting smoking in public places affect cigarette consumption. The adult results indicate that the price elasticity of demand is unstable over time, ranging from 0.06 in 1970 to -0.23 in 1985. These estimates are lower than most found...

Lifetime Incidence and the Distributional Burden of Excise Taxes

Lifetime income is less variable than annual household income, since the latter reflects transitory shocks to wages, family status, and employment. This implies that lowincome households in one year have some chance of being higherincome households in other years, and significantly affects the estimated distributional burden of excise taxes. This paper shows that household expenditures on gasol...

Excise tax avoidance: the case of state cigarette taxes.

We conduct an applied welfare economics analysis of cigarette tax avoidance. We develop an extension of the standard formula for the optimal Pigouvian corrective tax to incorporate the possibility that consumers avoid the tax by making purchases in nearby lower tax jurisdictions. To provide a key parameter for our formula, we estimate a structural endogenous switching regression model of border...