Skip to main content
U.S. Department of Energy
Office of Scientific and Technical Information

Comparison of gasoline sales taxes and automobile efficiency taxes as methods for reducing gasoline consumption

Book ·
OSTI ID:5505199
Sales tax and automobile efficiency tax schemes are compared within a simplified general equilibrium model of an economy. Firms are assumed to operate with one input constant coefficient production functions, and all individuals are assumed to have identical utility functions and initial endowments. It is found that within this simple model, gasoline taxes will definitely lead to a reduction in gasoline consumption, while automobile efficiency taxes may actually increase gasoline consumption. It is shown that for any efficiency tax program which does reduce fuel consumption, the sales tax program which accomplishes the same reduction in fuel consumption yields a Pareto superior allocation of other resources.
OSTI ID:
5505199
Country of Publication:
United States
Language:
English