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A Fee is a Tax!

From Issue: Volume XXII - Number 12

By Taylor Ramsey

We hear it all the time. Our elected representatives contemplate increasing our taxes because they need more money to run our federal, state and local government agencies to support their never ending spending increases. I am sure they worry that if they increase our taxes too often the taxpayers may begin to grow restless. Creating restless taxpayers should be avoided whenever possible as each representative must run for re-election at some point. What to do?

You got it. For our elected representatives to steer clear of the negative image taxpayers may have of them for increasing taxes, they simply discard the tax and create a fee. Problem solved!

A “tax” is a compulsory contribution to state revenue, levied by the government on workers’ income and business profits; or added to the cost of some goods, services and transactions. A “fee” is a payment made to a professional person or to a professional or “public” body in exchange for advice or services. Whether you call it a tax or a fee, the government forces you to hand over a portion of your income.

State Senator, Mark DeSaulnier (Democrat) has proposed Senate Bill 1077 that will allow him to watch you as you drive. SB 1077 establishes a pilot program to study the idea of charging a mileage fee, based on how far you drive, to offset the lower amount of taxes collected through the sale of gasoline.

Currently we pay 52.9 cents a gallon in gas taxes. With the increase of more fuel efficient and low emission vehicles the consumption of fuel has decreased and the gas taxes collected reflect that decline. In order to offset the decline in gas taxes collected Senator DeSaulnier wants to seriously consider charging you a required fee for every mile you drive.

Remember President Obama’s Car Allowance Rebate System (Cash for Clunkers) back in 2009? He did all he could to reduce the amount of gas taxes collected by spending about $2 billion to incent owners of older cars to turn them in for a $2,000 credit toward the purchase of a car that would use less gas.

As many of you know, the IRS (via IRS Code Section 30D) provides a credit to the purchaser of a Qualified Plug-in Electric Drive Motor Vehicle in the amount of about $2,500. However, depending on the car, you could collect as much as a $7,500 credit.

The California Air Resources Board administers the “Clean Vehicle Rebate Project and offers up to $2,500 in electric vehicle rebates for eligible zero-emission and plug-in hybrid cars.

The three illustrations above show that our government officials are doing all they can to generate less revenue via gas taxes. Not to worry. Instead of creating a tax to make up for the lost gasoline taxes, Senator DeSaulnier wants to create a fee, not a tax! He is obviously concerned about re-election.

Speaking of mandatory taxes and fees. I researched the charges on my phone bill and here is a consolidated list. I am required to pay; 4 “Funds”, 3 “Charges”, 1 “PUC”, 1 “Lifeline”, 7 “Fees” and 13 “Taxes” for a total of 42 items beside my phone service. Note, 69 percent of those charges are not considered taxes!

I researched how, we as taxpayers, fare in comparison with the other states in our Union to determine where we rank in taxes paid. We are in the top four in highest taxed states as the numbers vary by whose report you read. This is the scary part. They compile only the taxes paid and I found nothing said or acknowledged concerning the fees If you add in the fees, the amount we pay for our government entities must be astonishing.

I understand the example I used above regarding less gasoline taxes being collected is because government and private industry are doing all they can to clean up the air. In my opinion, it has no effect on global warming, but clean air is a good cause.

The point is this. We pay more than enough in taxes and fees to cover the cost of maintaining our federal, state and local government and agencies. Our elected representatives are doing a horrendous job in spending our money wisely. Why we continue to elect the same spenders is beyond me.

Our delegates are deliberately lying and intentionally being deceitful when they attempt to increase our taxes by substituting the word “fee” for the term “tax”. Keep them honest, call them on it.
Taylor’s Blog:
Twitter: @TaylorPRamsey