Essays on Tax Policy Assessment Considering Electric Vehicle Growth

In recent years, electric vehicles (EVs) have continued to grow. According to one forecast, EV share among registered cars will reach about 7% within a decade. The high share of EVs will accelerate the deficit in government revenues from gasoline taxes. Therefore, a vehicle miles traveled (VMT) tax is being discussed as an alternative to the automobile fuel tax. The government is considering the policy shift from a gasoline tax to a VMT tax, that affects almost populations, but few studies have evaluated the new policy while taking into account the growth of EVs. This paper bridges the gap between assessing the VMT tax and considering increasing EV penetration.Chapter 1 discusses the distributional effect of a VMT tax when considering the penetration of electric vehicles. It studies the impact of a VMT tax introduction on vehicle choice and utilization in a two-period model that links two decisions on vehicle choice and subsequent driving. Also, it examines the consumer surplus changes in the short term due to policy shifts from a gasoline tax to a VMT tax according to vehicle types, fuel economy, and household attributes. The results show that the revenue-neutral VMT tax would increase consumer surplus by a modest $2 per vehicle per year. It also suggests that even if the government imposes the same federal VMT tax rate, each state could be a winner or loser depending on the average MPG, miles driven, and VMT elasticity. Ultimately, the results show that shifting policy towards a VMT tax becomes more efficient as the penetration of EVs grows. When the EV share reaches 5%, the incremental EV share generates an additional surplus equal to twice the surplus from adopting the revenue-neutral VMT tax. It can also reduce revenue and expenditure discrepancies without changing the tax rate.Chapter 2 explores a VMT tax to increase government revenues as electric vehicle penetration grows and the long-term impact of that tax on consumer surplus. By taking the estimates from