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2601937 
Journal Article 
The optimal gas tax for California 
Lin, CYC; Prince, Lea 
2009 
Yes 
Energy Policy
ISSN: 0301-4215 
37 
12 
5173-5183 
WOS:000272426500017 
This paper calculates the optimal gasoline tax for the state of California. According to our analysis, the optimal gasoline tax in California is $1.37/gal, which is over three times the current California tax when excluding sales taxes. The Pigovian tax is the largest part of this tax, comprising $0.85/gal. Of this, the congestion externality is taxed the most heavily, at $0.27, followed by oil security, accident externalities, local air pollution, and finally global climate change. The other major component, a Ramsey tax, comprises a full $0.52 of this tax, reflecting the efficiency in raising revenues from a tax on gasoline consumption due to the inelastic demand of this consumption good. (C) 2009 Elsevier Ltd. All rights reserved. 
Gasoline tax; California; Gasoline demand elasticity