ABSTRACT
This chapter presents statistics on the patterns of gasoline expenditure as a share of income and total expenditure, motivating subsequent analysis of what explains the differences between the incidence measures. The long-standing view that excise taxes such as the gasoline tax are regressive, imposing a heavier burden on low-income households than on their higher-income counterparts, played a central role in shaping the 1990 budget compromise. The chapter explores the characteristics of households who fare relatively better in the expenditure than in the income distribution. Two-thirds of the income received by households in the lowest expenditure decile is indexed. The dramatic differences between income and expenditure-based incidence measures suggest the need to analyze why income and outlay rankings diverge. Data on income and expenditure patterns are drawn from the 1985 Consumer Expenditure Survey, a stratified national sample of approximately 2000 households.
