Tax: A contribution for the support of a government required of persons, groups, or businesses within the domain of that government. A fee or dues levied on members of an organization to meet its expenses. – American Heritage Dictionary
Everyone knows that the best tax is one someone else pays.
Hence, our lawmakers in Pierre generally go to great lengths to avoid raising “taxes,” but often find less angst about “fees.”
The word “tax” has a colorful history in our country, going back to the Boston Tea Party and before.
The word “tax” cost at least one president re-election. When the President George H.W. Bush said, “Read my lips, no new taxes,” and then he raised taxes, the voting public turned him out. But it wasn’t just that he raised “taxes,” that hated word, it was because he reneged on a pledge.
In Pierre this past legislative session, some lawmakers disagreed if there really was a difference between a “fee” and a “tax.”
A tax generally refers to money paid to a government entity for general fund purposes. Taxpayers can’t control where their tax dollars are spent; that’s handled by their elected officials. Many times these funds are spent on programs objected to by different groups of taxpayers. For example, conservatives oppose using tax dollars to fund abortions. Liberals don’t like spending tax dollars on subsidies for oil companies. These are generalizations, of course.
Fees are different. Most of us see a “fee” as a charge for a specific service, often set by the government. We pay a fee to obtain a hunting license, for example. If you don’t hunt, you don’t pay the fee. Fees produce less ire among citizens because many of them are optional. The word “fee” often is preceded by the word “user,” and so it takes on the cloak of fairness. But sometimes it gets confusing. When lawmakers needed to raise money for roads and bridges, they raised the “tax” on fuel by 6 cents and the “fee” on vehicle registration by 20 percent.
Whatever you call it, please don’t muddy the water even more by using the term politicians love: “revenue enhancement.”
April 22, 2015