Maryland Taxes Rain

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[pullquote]Maryland’s government recently instituted a “rain tax.” The state has instructed the counties to tax landowners for the size of their roofs and paved services, because rainwater runs off of these impermeable surfaces and into the sewers. So you’re responsible for the amount of rain you don’t absorb.[/pullquote]

Yes, you read that correctly. Maryland taxes rain.  According to the Washington Examiner →

As we all know, taxing something creates incentives.  In this case, it’s easy to predict that some Maryland homeowners will simply tear up their paved driveways, sidewalks, etc.  Replacing the sidewalks with spaced pavers solves the problem of muddy shoes.  If there’s something similar for driveways, I don’t know about it.

But consider the meta-implications.  Taxing an activity usually reduces the equilibrium quantity.  In this case, rain is being taxed.  Will Maryland begin to experience droughts?  We shall see.  But remember — you read it here first.

(h/t to Megan McArdle @asymmetricinfo for tweeting about this.)

 

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.