Abstract
We analyze the efficiency and equity implications of a federal excise tax on outdoor recreation equipment for funding U.S. public lands. Using microdata on consumer expenditure, we estimate a two-stage quadratic almost ideal demand system for recreation equipment and simulate the effects of a 5% tax. The tax generates a modest welfare loss as a share of tax revenues raised: $0.04 for every $1 of revenue. It is approximately proportional to income across the entire income distribution, but households in the lowest-income quintile pay more as a share of income than do households in the other four income quintiles.
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In this issue
Jump to section
- Article
- Abstract
- 1. Introduction
- 2. Outdoor Recreation-Related Taxes
- 3. Estimating the Demand for Outdoor Gear
- 4. Tax Revenues and Welfare Effects of a Recreation Equipment Sales Tax
- 5. Incidence of Recreational Equipment Tax across Income Groups
- 6. Discussion: Alternatives to a Gear Tax
- 7. Concluding Remarks
- Acknowledgments
- Footnotes
- References
- Figures & Data
- Supplemental
- Info & Metrics
- References