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Distortionary Company Car Taxation: Deadweight Losses through Increased Car Ownership

Author

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  • Jos N. van Ommeren

    (VU University Amsterdam)

  • Eva Gutierrez-i-Puigarnau

    (VU University Amsterdam)

Abstract

This discussion paper led to a publication in Empirical Economics 2013, 45(3), 1189-1204. We analyse the effects of distortionary company car taxation through increased household carownership for the Netherlands. We use several identification strategies and demonstrate thatfor about 20 percent of households company car possession increases car ownership. Theannual welfare loss of distortionary company taxation through increased car ownership isgenerally rather small, maximally €120 per company car, and likely much less. However, forpolicies that exempt households from paying tax on their company car, the annual deadweightloss is likely higher.

Suggested Citation

  • Jos N. van Ommeren & Eva Gutierrez-i-Puigarnau, 2011. "Distortionary Company Car Taxation: Deadweight Losses through Increased Car Ownership," Tinbergen Institute Discussion Papers 11-100/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20110100
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    References listed on IDEAS

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    Cited by:

    1. Dimitropoulos, Alexandros & van Ommeren, Jos N. & Koster, Paul & Rietveld, Piet, 2016. "Not fully charged: Welfare effects of tax incentives for employer-provided electric cars," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 1-19.
    2. Börjesson, Maria & Roberts, Christopher, 2023. "The impact of company cars on car ownership," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    3. Alexandros Dimitropoulos & Jos N. van Ommeren & Paul Koster & Piet Rietveld†, 2014. "Welfare Effects of Distortionary Tax Incentives under Preference Heterogeneity: An Application to Employer-provided Electric Cars," Tinbergen Institute Discussion Papers 14-064/VIII, Tinbergen Institute.
    4. Nijland, Linda & Dijst, Martin, 2015. "Commuting-related fringe benefits in the Netherlands: Interrelationships and company, employee and location characteristics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 358-371.
    5. Voßmerbäumer, Jan & Wagner, Franz W., 2013. "Steuerwirkungen betrieblicher Entgeltpolitik," arqus Discussion Papers in Quantitative Tax Research 144, arqus - Arbeitskreis Quantitative Steuerlehre.
    6. Chaloupka, Christine & Kölbl, Robert & Loibl, Wolfgang & Molitor, Romain & Nentwich, Michael & Peer, Stefanie & Risser, Ralf & Sammer, Gerd & Schützhofer, Bettina & Seibt, Claus, 2015. "Nachhaltige Mobilität aus sozioökonomischer Perspektive – Diskussionspapier der Arbeitsgruppe "Sozioökonomische Aspekte" der ÖAW-Kommission "Nachhaltige Mobilität" (ITA-manu," ITA manu:scripts 15_02, Institute of Technology Assessment (ITA).

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    More about this item

    Keywords

    Fringe benefits; taxation; company car;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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