An Analysis of Potential Impacts of the Proposed Vehicle Miles Traveled Tax Bill in California
Abstract
Should a vehicle miles traveled (VMT) tax be implemented in California? I perform a literature review covering all papers that study VMT tax systems in other contexts and discuss how effective these are at reducing miles traveled and air pollution. I use California public infrastructure and vehicle sales data to show what a VMT in California would cost denizens in the state. I conclude with a discussion on the global applicability of this tax structure based on my findings. A VMT tax can be effective at solving a revenue deficit provided incomes are high enough, there are trusted institutions, and other transit options for consumers to substitute.
Keywords: Climate Change, Emissions, Greenhouse Gases, Externalities, Pigouvian tax
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