Distributional Consequences of Gasoline Taxation in the United Kingdom

Abstract

This paper assesses the regressive effects of gasoline taxation in the United Kingdom. When all households are considered, middle-income households suffer most of the burden. When only car-owning households are considered, gasoline taxation is strongly regressive. Low-income households that own a car are more severely affected than high-income households because they spend a larger proportion of their income on motoring. This conclusion is similar to that of previous studies on the topic.