February 12, 2026

The results also show that increases in gasoline taxes in a state will be negatively correlated to the gasoline prices net of the gasoline tax . The rank correlation is negative and marginally statistically significant, suggesting that the burden of the tax falls on the state fixed or immobile factors. The rank correlation with the gasoline taxes and the net of price gasoline taxes and the the broader cost of living indices such as the RPP is not statistically significant. We attribute the lack of significance on the pairwise rank correlation is attributable to the fact that the drivers of the RPP’s and the cost of manufacturing and the retail delivery of the gasoline are broader than the tax on gasoline. A readily available and easy to access broader measure of the tax structure is needed in order to be able to assess the impact of a state policies on its competitive environment. Nevertheless, the results are consistent with the proposition that mobile factors will relocate to states with lower cost of living indices in order to stretch their income and gain an improve their affordability of goods and services.

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