WHO PAYS THE GASOLINE TAX

The regressivity of the gasoline tax and other consumption taxes has b een challenged on the grounds that the use of annual as opposed to lif etime income and consumption data leads to a substantial overestimate of regressivity. Rather than rely on proxies for lifetime income, in t his paper panel data on gasoline consumption and income are used to me asure incidence over an intermediate time period. When people are grou ped into 11-year average income deciles, average gasoline tax burdens are only slightly less regressive than annual burdens. The main reason for the similarity of annual and intermediate-run burdens is the limi ted degree of income mobility over an 11-year period.