Distribution Effects Of Gasoline Taxes In The South: Comparison Of the Expenditure and Income Approaches

Abstract

Variations in the spending on gasoline and motor oil by quintiles are determined using both an income and expenditure base. Total expenditure data in relationship to expenditures on gasoline and motor oil in the Southern urban areas in 1990 are a relatively stable percent over the first four expenditure quintiles, 4.4 to 4.5 percent. Using income before taxes, depicts a continual decrease in the percent of income spent on gasoline, as expected. In the Southern states a gasoline tax loses much of its regressivity when permanent income is used as the base, and becomes markedly regressive when income before taxes becomes the basis for determining the tax burden.