When a Fee is Not a Fee, but a Tax Hike

(Chuck Muth) – It’s a new year, a new election cycle and a lot of new candidates, so let’s revisit this question as to what constitutes a “user” fee – the raising of which might be objectionable, but not a violation of the Taxpayer Protection Pledge – and which fees are actually “taxes by another name” and a clear violation.

Here’s how Americans for Tax Reform, sponsors of the Tax Pledge, explains the distinction:

“To qualify as a fee, a charge must fund a specific service, with no excess going into a general fund; the charge must be paid only by those who use that specific government service; and individuals must have the choice whether to purchase the service from government (and thus pay the fee) or to purchase the service from a private business. Excise taxes, sales taxes or taxes levied on businesses to pay for government regulation are not user fees.”

So a true user fee is something you can choose to pay or choose not to pay. For example, you can choose to pay the user fee to hold a group picnic or wedding reception at a state park….or choose to hold your group picnic or wedding reception somewhere else. In other words, paying the fee is VOLUNTARY.

On the other hand, imposing “Higher fees for restaurants to fully cover the cost of health inspections” – a proposal Las Vegas Sun reporter David McGrath Schwartz says is included in the 86-page budget the governor’s office is preparing to introduce in the upcoming special session – absolutely WOULD be a violation of the Taxpayer Protection Pledge since it’s a tax on businesses for government regulation which the businesses have no choice but to pay.

As to the argument that restaurants have “agreed” to the fee increase, we all know that such “agreements” are made under duress; that the affected industries/businesses only “agree” with a gun to their heads, hoping to avoid something WORSE.

Indeed, if the businesses supposedly have “agreed” to pay the higher fees, then make paying the higher fees VOLUNTARY, not mandatory. Then we’ll see how many of the affected businesses “agree” to cough up the extra dough.

In addition, if government regulation of a particular industry is deemed to be in the best interest of the people of Nevada, then the people of Nevada should shoulder the cost of that regulation, not the businesses being regulated and taxed out of business.

Here’s the bottom line: The only acceptable way to raise taxes or fees is to go out and collect enough signatures from Nevada citizens to place the tax or fee increase proposal on the ballot – just as the Bolsheviks at the Progressive Liberal Alliance of Nevada (PLAN) are doing in their effort to raise taxes on the mining industry.

Clearly, I don’t agree with PLAN’s plan, but at least they’re going about it the right way….a citizen-initiated citizen ballot initiative.

And if a majority of Nevadans voting in a statewide election (not just in Clark and Washoe counties) vote to increase the fee or tax, providing said fee or tax hike isn’t ruled unconstitutional, the people….not lobbyists and special interests….will have spoken and the tax will be raised.

Otherwise, legislators should keep their greedy little paws out of our pockets.