Wednesday, June 27, 2007

Here's One for Those Who Say Raising Government Fees Are the Same as Raising Taxes

The Metro Council's most vocal, most visible conservative, Eric Crafton, told his fellows during last night's budget debate that the Council should be proud that it increased the budget without raising taxes. While heaping his praise, Mr. Crafton neglected to mention that the Council was able to raise revenues to provide services to the community by raising fees on items like alarm permits and immunizations (and by cutting services elsewhere).

We hear periodic resistance on the right to raising government fees, because such action is judged to be a de facto tax increase by another name. Council conservatives, who generally give expenditures a good tongue lashing, ignored the fee raises during last night's debate of the budget. That signifies a rubber stamp of fee raises.

However, whether they are called "fees" or "taxes," revenues were raised to pay for services that Nashvillians wanted last night, and any remaining resistance to raising revenues caused the erosion of public services in departments like Metro Parks.

UPDATE: Regarding one of those fees vs. taxes debates, see this. Make sure to include this, too. Then see this.

1 comment:

  1. I can't understand this debate. A tax by any other name is still a tax. Any tax can be expressed as a fee (or even a "license fee"--e.g. your income taxes give you an implicit license to continue to live in the U.S.). It sounds like semantics to me. Anyone trying to find the cost of paying for government should tally all property taxes, license fees, etc.

    I suppose it might be worthwhile to distinguish usage fees from other fees. Economists usually think of a usage fee as a direct quid-pro-quo. For example, perhaps I have to pay a small fee to make use of a small claims court or a toll road. I'm paying directly for the use of the court's services, or the use of the road. It's more like buying a good or service than it is like paying a tax. The provider of the good or service just happens to be the government. This kind of usage fee is not typical for many government services due to their public good nature.