There has been a lot of talk on social media over the past 24 hours about an alleged proposal by the Harris administration to impose a 20 percent excise tax on everything golf-related. Like so many things on the internet, this proposal appears to have no basis in reality and comes from a parody account on Twitter/X.

However, golf courses also have countless externalities, the costs of which are largely borne by society: from environmental impacts such as water consumption, runoff from chemical fertilizers, habitat destruction and soil erosion, to waste generation and the use of valuable land.

Although the Harris administration has no plans to introduce a golf tax, perhaps the idea is not such a bad one.

Social externalities of golf courses

The environmental impact of golf courses is perhaps the most pressing issue. Maintaining the landscaping of a golf course requires enormous amounts of water – often in regions where water is scarce. In dry areas, this can exacerbate droughts and place additional strain on local water reserves. In addition, the use of chemical fertilizers and pesticides creates runoff that can contaminate the remaining water, harming aquatic life and the entire ecosystem.

Soil erosion is another problem that is exacerbated by the existence of golf courses. The constant mowing and use of heavy machinery, as well as additional foot traffic, can lead to soil compaction. This reduces the soil’s ability to support plant life, increases the risk of erosion, and changes the water runoff pattern. Golf courses also generate significant waste, from grass and leaf clippings to packaging and disposable items used by visitors and players.

In addition to the direct environmental impacts, golf courses also raise questions about land use. In many urban and suburban areas, golf courses occupy valuable land that could potentially be used for other purposes that would generate higher property tax revenues or benefit a broader segment of the population. The exclusivity of golf means that these large urban green spaces are often reserved for a relatively small and affluent subset of the population, raising questions about social equity and the use of public resources.

If used as residential or commercial space, these areas would generate higher property tax revenues and would be of greater benefit to the public if they were reserved for public recreational activities.

Towards a justification for a “golf tax”

Given the often significant externalities associated with the existence of golf courses, the idea of ​​a golf tax could be an effective way to internalise these costs. Such a policy would ensure that those who benefit from golf pay for the wider social and environmental impacts of their chosen leisure activity.

A 20% federal excise tax on golf equipment, coupled with similar state-level taxes on golf goods and services, could be a viable policy solution. There are already federal excise taxes on things like fishing and hunting equipment, with revenues from those transactions earmarked for fisheries and forest conservation, respectively.

Revenue from a golf tax could be earmarked for environmental restoration projects, water conservation programs, or the creation of alternative recreational areas that are more accessible to the public.

Ultimately, such a policy could be a step toward greater wealth equality – with the purchase of golf items being an indicator of greater wealth. By taxing an activity often associated with wealth and privilege, the government could redistribute resources in a way that benefits a wider range of people, while placing the tax burden on those most able to bear that burden.

Reservations, criticisms and conclusions

Opponents of a golf tax might argue that golf courses create green space in urban areas and contribute to the local economy through tourism, job creation and the associated tax revenue. They might also argue that an excise tax on golf equipment would penalize domestic retailers while allowing foreign equipment suppliers to forgo the tax and undercut the competition.

Determining which goods and services should be taxed, by which jurisdictions, and how the revenue should be distributed are all complex questions that require careful policy consideration and planning. Despite these challenges, and the fact that the idea originated in a parody post, a golf tax is worth considering as part of a broader discussion about how to address the environmental and social costs of luxury activities.