@article{Han:332913,
      recid = {332913},
      author = {Han, Sang-Hee},
      title = {Assessments of alternative funding options for  infrastructure investment},
      address = {2017},
      year = {2017},
      note = {Presented at the 20th Annual Conference on Global Economic  Analysis, West Lafayette, IN, USA},
      abstract = {In this economic modeling research paper, the KPMG  computable general equilibrium (CGE) model is used to  analyze the impact on the U.S. economy of a hypothetical  infrastructure investment program funded by three  alternative options: (1) an increase in the federal fuel  excise tax rate, (2) introduction of a nation-wide vehicle  mileage tax (VMT), and (3) introduction of a nation-wide  vehicle weight tax. To demonstrate potential applications  of a CGE model for the policy impact analysis, various  modeling results and issues in relation to additional  infrastructure spending funded by increases in the federal  fuel excise tax rates are first discussed. Then the main  macroeconomic impacts under the federal fuel excise tax  funding option are compared with those under the other two  funding options. KPMG’s CGE model includes the potential  behavioral response of all sectors of the economy to the  investment program as required under norms used by the  Congressional Budget Office (CBO) and the Joint Committee  on Taxation when evaluating major tax proposals. In the  usual economic impact modeling exercise, the social net  benefits of infrastructure spending are often assessed as a  complement to a narrowly defined financial cost/benefit  analysis. This aims to highlight the flow-on economic  benefits of an infrastructure project. However, such  analysis is often undertaken without due consideration of  funding sources and can potentially lead to an  overestimation of a project’s net benefits.  In this paper,  the economic benefits of infrastructure spending are  compared to the economic costs of introducing new taxes  based on the user-pay principle. The net social benefits of  alternative funding options are assessed in terms of  economy-wide flow-on impacts. It is important to note that  this model exercise was undertaken in isolation from other  current and future potential forms of funding.},
      url = {http://ageconsearch.umn.edu/record/332913},
}