European Union Guidelines are the cornerstone of project evaluation in Europe. An important aspect of this method is the exclusion of taxation. The Guidelines advise to discard from the calculation the loss from reduced fuel taxation, while benefits are computed based on consumers' surplus. We argue that when applied to projects that shift demand from a highly taxed mode to a slightly less taxed one, the proposed method violates the principle of net-of-taxes computation. Finally, we show numerous analytical, practical, and informative advantages of including taxation, and dismiss the claim that 'taxes should be excluded because they are a transfer'.

Massiani, J. (2021). An Inconsistency in the European Union Guidelines for Cost-benefit Analysis of Investment Projects. JOURNAL OF TRANSPORT ECONOMICS AND POLICY, 55(Part 3), 192-219.

An Inconsistency in the European Union Guidelines for Cost-benefit Analysis of Investment Projects

Massiani, J
2021

Abstract

European Union Guidelines are the cornerstone of project evaluation in Europe. An important aspect of this method is the exclusion of taxation. The Guidelines advise to discard from the calculation the loss from reduced fuel taxation, while benefits are computed based on consumers' surplus. We argue that when applied to projects that shift demand from a highly taxed mode to a slightly less taxed one, the proposed method violates the principle of net-of-taxes computation. Finally, we show numerous analytical, practical, and informative advantages of including taxation, and dismiss the claim that 'taxes should be excluded because they are a transfer'.
Articolo in rivista - Articolo scientifico
Cost Benefit Analysis ; taxation ; Guidelines
English
2021
55
Part 3
192
219
none
Massiani, J. (2021). An Inconsistency in the European Union Guidelines for Cost-benefit Analysis of Investment Projects. JOURNAL OF TRANSPORT ECONOMICS AND POLICY, 55(Part 3), 192-219.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/324961
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