Efficiency and Equity of an Outdoor Recreation Equipment Tax to Fund Public Lands

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 con-sumer 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 wel-fare loss as a share of tax revenues raised: $0.04 for every $1 of revenue. It is approxi-mately proportional to income across the en-tire 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. (JEL H21, H41)