Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215021 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 8019
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This study calculates efficient taxes on gasoline and road use designed to combat driving related externalities when motorists avoid taxes due to an excessive economic driving-style. The efficient tax on gasoline is reduced below the Pigouvian rate due to such avoidance. The current US tax rate on gasoline is below the efficient tax rate while the current UK rate is slightly above the efficient rate in this case. A GPS-based road user charge prevents such avoidance. The efficient GPS-based road user charge should be combined with a tax on gasoline which promotes an economic driving-style that lowers accidents.
Subjects: 
transportation
optimal taxation
environmental taxation
global warming
JEL: 
H20
H21
H23
Q58
R48
Document Type: 
Working Paper
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