Optimal congestion taxes in a time allocation model

The purpose of this paper is to study optimal congestion taxes in a time-allocation framework. This makes it possible to distinguish taxes on inputs in the production of car trips and taxes on transport as an activity. Moreover, the model allows the implications of treating transport as a demand, derived from other activities, to be considered. The author extends several well known tax rules from the public finance literature and carefully interprets the implications for the optimal tax treatment of passenger transport services. The main findings of the paper are the following. First, if governments are limited to taxing market inputs into transport trip production, the time-allocation framework: (i) provides an argument for taxing congestion below marginal external cost, (ii) implies a favourable tax treatment for time-saving devices such as GPS, and (iii) provides a previously unnoticed argument for public transport subsidies. Second, if the government has access to perfect road pricing that directly taxes transport as an activity, all previous results disappear. Third, in the absence of perfect road pricing, the activity-specific congestion attracted by employment centres, by shopping centres or by large sports and cultural events should be corrected via higher taxes on market inputs in these activities (e.g., entry tickets, parking fees, etc.).

• Record URL:
  http://www.sciencedirect.com/science/article/B6V99-4YKFMJH-1/2/6592940e3c4c9dc13d7639b151116d77
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/01912615
• Supplemental Notes:
  • Abstract reprinted with permission from Elsevier.
• Authors:
  • De Borger, Bruno
• Publication Date: 2011-1

Language

• English

Media Info

• Media Type: Print
• Features: Appendices; Bibliography; References;
• Pagination: pp 79-95
• Serial:
  • Transportation Research Part B: Methodological
  • Volume: 45
  • Issue Number: 1
  • Publisher: Elsevier
  • ISSN: 0191-2615
  • Serial URL: http://www.sciencedirect.com/science/journal/01912615

Subject/Index Terms

• TRT Terms: Congestion pricing; Costs; Industrial location; Navigational aids; Optimization; Policy; Public transit; Road pricing; Subsidies; Taxation; Taxes; Travel; Travel demand
• Uncontrolled Terms: Time allocation models
• Subject Areas: Economics; Finance; Highways; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 01323865
• Record Type: Publication
• Files: TRIS, ATRI
• Created Date: Dec 28 2010 1:30PM