The State of CA is considering raising its gas tax by about $4B/yr over the next 5 years to fund infrastructure investment and direct some funds towards debt service. I'd like to model the overall impact of that increase across the economy, accounting for the effects of both a higher tax burden as well as the infrastructure spending, and possibly even the productivity improvements (from less congestion and better road quality). In addition to needing a measure of elasticity of demand I don't have anything in the way of a tax incidence distribution to know how to allocate among households and businesses and am not sure exactly how to model a general hike in an excise tax to allow the IMPLAN model to run it through the various sectors. So I have several questions: 1. Are you aware of any recent studies looking specifically at the impacts of infrastructure investment financed by hikes in the gas tax? 2. Is it feasible to increase the cost of a commodity (gasoline) and balance that off with an industry change for road building and repair? 3. Assuming I were able to determine the distributional impact between industry and households (with distributional impacts between household incomes) is it OK to model the impact that way? Thanks for your help!
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