Idaho Should Definitely Not Fund State Parks With Soda and Candy Taxes
August 20, 2009
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 tax 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 tax 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 tax 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 fees 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.
Was this page helpful to you?
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?Contribute to the Tax Foundation
Let us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?Give Us Feedback