Rumor has it Idaho State Park officials have proposed a tax on soda and candy, among other proposals, to help fund the State Park Service. The parks have lost some funding because gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. revenue from gas sold for boats and off-road vehicles has been redirected to pay for road maintenance. Some of this revenue also went to fund the Idaho State Police.
General government services like police and parks should not be funded by taxes on completely unrelated products, like candy and soda. Such taxes on targeted products, called excise taxes, have a proper place in taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. policy. As we have written many times before:
The standard economic justification for excise taxes is to help align the private and the social costs of an activity. There are cases where not all of the costs of an activity are borne by the direct producer and consumer. The textbook example is of automobiles and gas usage. In driving, an individual is creating both more pollution and more traffic for everyone. The individual does not bear all the costs for this action so they will tend to over-consume up until the private costs equal the private benefits. A properly implemented excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. would increase the private costs to equal the social costs.
If there is some social cost associated with soda and candy consumption (and I am not convinced that there is) then the appropriate excise tax would offset that cost regardless of whatever budget hole needs to be closed at the moment. Unfortunately, often excise taxes are seen as quick and easy revenue raisers because they are targeted at an often politically unpopular minority of the population (see recent cigarette tax trends). But a politically popular program that benefits the majority should not be paid for on the backs of a few taxpayers.
So then how should state parks be funded? If they are a public good then they should receive funding from general government revenue raised from broad based taxes. However, I would probably argue that state parks are more like a private good, in which case they would probably best be funded by user feeA user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided. A user fee is not a tax, though some taxes may be labeled as user fees or closely resemble them. s charged upon entry into the park. Increasing fees to state parks might not be popular, but it only makes sense that the people benefiting from the parks should be the ones paying for it.
Share