Titel:
Transport tax reforms, two-part tariffs, and revenue recycling - A theoretical result

Abstract:
We explore the interaction between taxes on ownership and on use of cars when households
face a discrete choice of purchasing a car or not. We use a simple labor-leisure model with a
logit formulation for the discrete choice of car-ownership to examine how a tax reform, which
shifts taxes from ownership to use of cars, affects welfare. Car transport is burdened with
negative externalities which lead to feedback effects on both the internal, and the external,
margin. We show that the welfare effect depends on choices on both the internal margin and
the external margin, and that effects on the external margin might affect the congestion
externality in car transport significantly. Furthermore, the effect of such a tax reform depends
on the initial tax level on car transport.

Forfatter:
Jens Erik Nielsen

Danske Keywords:
Skattereform, diskret valg, velfærdsanalyse

Engelske Keywords:
Tax reform, discrete choice, welfare analysis

År:
2006

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