by Joseph Henchman
April 04, 2013
Elected and appointed officials, who face the dual reluctance to raise taxes and cut spending, are increasingly turning to a strategy of hiding increased tax burdens through subterfuge: any number of contortions to deny that even an obvious tax is a tax. They label them user fees, fines, surcharges, revenue enhancements, special assessments, and so forth. For an elected official, the best tax can be one that raises lots of money without anyone noticing or, at least, anyone calling a tax. Public understanding of what a tax is, what a fee is, and the difference between the two can help strengthen taxpayer protection provisions, contribute to openness in tax policy debates, minimize distortions caused by hidden or mislabeled taxes, and help increase awareness of the full cost of government programs.