nep-pub New Economics Papers
on Public Finance
Issue of 2022‒08‒29
two papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. The Effect of Diesel Tax Rates on the Daily Commuting of US Workers: An Effective Instrument to Promote Sustainable Mobility? By Belloc, Ignacio; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  2. Corporate Taxes Reduce Investment: New Evidence from Germany By Sebastian Link; Manuel Menkhoff; Andreas Peichl; Paul Schüle

  1. By: Belloc, Ignacio (University of Zaragoza); Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: In this paper, we analyze whether diesel fuel taxes can be an effective tool to boost the daily commuting of US workers towards the use of green modes of transport. To that end, we use data from the American Time Use Survey 2003-2019 and explore the factors influencing commuting time and the proportion of commute using alternative modes of transport, including walking and cycling. Our results indicate that diesel fuel taxes are linked to a reduction in the total time devoted to commuting, and to the proportion of commuting by private car, and to an increase in the proportion of commuting done by green modes of transport such as public transport and walking. This relationship is not homogeneous in the urban dimension, as the effects on total commuting time and the percentage of commuting by public transport is present in urban areas only. In a context where many countries are implementing policies aimed at increasing the use of sustainable modes of personal mobility, our results indicate that taxing fuels used for personal mobility may be an efficient way to decrease the use of more polluting modes of transport and encourage more eco-friendly alternatives while commuting.
    Keywords: commuting time, green mobility, state diesel taxes, American Time Use Survey
    JEL: D1 Q4 R4
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp15416&r=
  2. By: Sebastian Link; Manuel Menkhoff; Andreas Peichl; Paul Schüle
    Abstract: This policy brief provides novel empirical evidence on the causal effect of increasing corporate taxes on firm investment. The study combines unique data on investment plans and their realizations of firms in the German industrial sector and data on more than 1,400 local tax changes in the specific system of business taxation in Germany. We show that firms reduce their investments if corporate taxes were increased. An increase of corporate tax rates to stabilize fiscal revenues would be especially costly during recessions. We conclude that fiscal policy should therefore avoid higher corporate taxation in times of economic crisis. Moreover, our results have implications for the op-timal design of fiscal federalism in Germany. Strong dependencies of municipalities on local business tax revenues should be avoided, as they can be very harmful during recessions.
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:ces:econpb:_44&r=

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