Taxes or fees?

This is kind of a poll. With all of the contentious discussion about taxes, one is compelled to wonder where people think the various government agencies are going to get the money they need to keep functioning.

I would like to preclude the issue of just how many of these agencies we need or how they could be made more efficient, thereby saving untold amounts of money. I’m just thinking about where that money is supposed to come from.

To my knowledge, there are only two sources of revenue available to the government (again precluding bribes, extortion and the like). It’s either taxes or fees. From where I sit, the more difficult it becomes for government agencies to raise money from taxes, the more fees we see. And the higher these fees go. Parking tickets, which used to cost a couple of bucks, are now running $30 to $50 a pop. Water? Garbage collection? Business license fees? All going through the roof. And let’s not even talk about the cost of building permits!

I have never had a problem with paying my fair share. I want the fire truck to show up if my house is burning. Cops are never welcome until you need one and then you want one there ASAP! I hate potholes. And I realize that these things and much more cost money and that money has to come from somewhere. But as the resistance to higher and/or more equitable taxes increases, more and more of the burden is falling on business.

Many larger businesses get special consideration as do many upper income individuals who pay a lower rate on investment income than the guy out there on your shop floor pays on his hourly wages. So that burden is falling more and more on small business, most of which are already struggling to stay alive and now reeling under the increased load of constantly escalating fees which are nothing more, IMMHO, than a form of taxes. It does not take an act of Congress to raise fees, just a simple decision by the local government agency. We never get a chance to vote on it or even voice an opinion. It just happens. You get your water bill and it’s double what it was last month.

Remember, this is not a commentary, it’s a question. What do you think?

D.D.

COMMENTS

  1. Mark Slafkes wrote:

    The tax/fee burden, as a percentage of income, falls most heavily on the low income people and declines as people’s income rises. For those of you who disagree, please remember sales taxes, drivers’ licenses, fuel taxes, and all of small and large taxes/fees we pay.

    It continues to cost more money, each year, just to maintain the low level of services we receive. For example, the cost of an education beyond high school is phenomenally high. If people have any interest in maintaining their high quality of life and the competitive stature of the US, we need to tax ourselves more just to train ourselves to be more competitive. If we wish to have a high level of manufacturing expertise, as in woodworking, we need to train ourselves much better than we currently do.

    This all costs money and if the difference in how I spend my money is the frequency with which I buy a BMW or Lexus, guess which one benefits the US and which one benefits others.

  2. oldmillrat wrote:

    In California at least, regulators and legislators keep looking for things to regulate and legislate which always cost money. The money has to come from somewhere if they are to continue to justify their existence.

    I talked at length to the owner of an auto repair shop recently, wondering why it costs so much to do simple auto repairs. He showed me the amounts of money he was required to pay to different agencies, many of whom I didn’t even know existed. It was staggering. He takes in about a half million dollars annually, and more than half of it goes to taxing agencies. He still has employees and rent to pay not to mention tools and supplies. His profit is less than what he pays his employees. Hell of a way to do business.

  3. Dennis wrote:

    I think taxes should be used to pay for services or protection that everyone uses, such as police,fire protection,armed services, etc. As for things and services that only a small portion of the public use, a fee, excise tax, or any other type of targeted tax to the recipient of the service is fair. Not a popular opinion but I’ve always thought that road use fuel taxes were one of the most fair taxes there are. The bigger, more road damaging vehicles require more fuel and therefore more taxes and lighter less road damaging vehicles use less fuel therefore less tax. If you don’t drive, no tax. You might say that everyone benefits from things shipped on the roads but the tax is rolled into the price of the goods.
    Dennis

  4. Howard Van Vlzah wrote:

    In my experience on a school board which had not had a tax increase in many years and was borrowing money from the next years’ taxes, I learned that people are willing to pay taxes when shown that their present taxes are used carefully for their benefit, and it is made equally clear that without an increase, program cuts will have to be made. I believe that the recent election made it clear ro Congrss that they have a responsibility to justify their present autjorized expenditures, showing their results, and then follow with a tax increase to balance the budget. That worked successfully in our school district, with approval of one tax increase and a professed acknmowledgement that another one would be required the next legal time. The money will come fro the people are convinced that it is being used well for their benefit. It is a terrible mistake to cut sevices without giving the people an opportunity to pay for them if they so choose.

  5. Greg wrote:

    Taxes and fees are supposed to fund the legitimate activities of the local, state and federal governments. It is impossible to have a discussion of how without determining what is legitimate. Schools for over 150 years were funded by local proepry tax until the Department of Education was created, then the Federal Government got invovled and the schools have more money than ever before and yet are worse than they were in the 70′s without Federal money. The larger the government gets the more it extracts from the private sector and the worse the services become. Taxes or fees used to fund illegimate purposes if removed would leave more than enough money to fund the legimate purposes of government.

  6. Doug wrote:

    You can call it whatever you like a tax or a fee, it’s the same thing in actuality. Our local government now requires me to have four licenses. That’s a fee increase right. The politicians can honestly say they have not raised taxes when in actuality they have they just call it something else. The other thing they do here is arbitrarily raise your inventory tax. They never do an onsite inspection. They just raise the value of your inventory and personal business property and there fore increase their revenue. They did not raise the tax rate but I am being asked to pay four times as much this year as last. The only people who don’t get treated this way are people who are wealthy enough to have a tax attorney working with their CPA. I have a good CPA but I can’t afford the attorney. I therefore pay what I am asked because if you contest the assessment, I tried that once, they look at you and say “Prove it is inaccurate and we will lower your assessment. But if we check ourselves we may find our estimated value is too low and you will owe more than we are asking.” They have much more time than I do to play games and argue. I need to be building cabinets. Like you I do not mind to pay my fair share. I do mind people like Mit Romney paying half the rate I do while complaining about high tax rates. The ultra wealthy should pay their fair share just as the rest of us do.

  7. Clint Struthers wrote:

    All great questions and great responses. It is clear that no one solution will solve the problem!

    Just a couple thoughts from my corner. Presently over 46% of Americans pay no federal tax, according to IRS data. The highest earners in the country currently pay over 75%% of personal income taxes paid, again according to IRS data. The wealthy also buy more and pay more sales, gas, and use taxes. They pay more permit fees and license fees as well. We have a progressive tax system in our country today which creates an environment where those who have the most already pay the most and those with the least pay the least.

    My business revenue and my investments make me one of those terrible rich people everyone likes to demonize today so I think I’m in a good position to shed a bit of light on this topic. First the current maximum personal income tax rate is 35% and the corporate income tax rate is now between 15 and 35%. My half of each employee’s Social Security and Medicare tax is 15.65% I pay over $25,000 per year in user permits and regarding regulatory fees dont even go there! I will only say that I have been in business for 25 years and one of the regulatory fees I pay was $125.00 annually 25 years ago, today it is over $12,000 a year!

    I am responsible for 55 salaries, 401(k) matching and health care costs as well. My employees depend on me and I value and depend on them! My company has grown from my wife and I working in our garage to it’s present size through hard work and taking a great deal of risk to achieve the success we have today. I don’t even know what only a 40 hour work week feels like, I normally work 50-60 and sometimes more and I don’t mind. Now mind you I am not complaining in the least but I would like to ask how much is enough? How much tax do you think is fair? I can’t remember a year when my combined tax obligating were less than 55% and yet half the country pays no tax at all!

    Here’s my thought; every American should pay some tax! I don’t care if their income is a wage or a government benefit, everybody pays tax, period! I hear whining all the time about this service or that service not being good enough or fast enough. I hear people complain because the government hasn’t done this or that for us yet. Yet nobody is getting up off their own butts to do anything themselves any more. We Americans today sound like snotty nosed teenagers when their allowance is a day late!

    Here’s what I’d like to see, how about our government get’s smaller? How about we eliminate all the competing agencies so there is only one agency overseeing specific things. The last month’s Audubon Magazine highlighted the plight of some little bird and in reading the article it was pointed out that 70 different government agencies were involved in overseeing the protection of this bird! A freaking bird! If 70 agencies over see one bird species what do we have in the area of taxation authority or the agencies that provide oversight when manufacturing or building goes on? I just spent 4 years wrangling with the EPA and the state DEQ to allow me to build a building on property I’ve owned for 30 years and that up until I submitted the plans to our local building department had been zoned industrial. The DEQ and the EPA have decided it is now a wet land because a ditch that traverses my property and that was dug by our county 25 years ago with my permission is now a waterway! Come on, it’s dry all summer and most of the winter. We have finally come to terms with them by proposing to enclose the drainage ditch in 6 foot diameter concrete pipe at the cost of nearly $500,000 to me so that I can use my own property for my own purposes!

    We do not need more tax money and we do not need more governemnt! What we need is for Americans to once again become a society of people who do things instead of a society of whiners who expect things!

    Do you know why we have so many so called jobs Americans won’t do and so many illegal aliens in our country today? Simple, Americans won’t do the jobs because they don’t have to! I grew up dirt poor and picked beans for our farmer neighbor to help my folks put food on the table, I worked a couple nasty jobs when I needed to pay for my education and you know what? It didn’t stunt my growth, my creativity or my self worth. It made me never wnat to have to do that job again and I invested in myself so that I would never have to!

    Please don’t talk to me about raising taxes because I don’t pay enough! Let’s talk about getting our government spending under control and forcing politicians to be accountable for the money they do spend!

    C J

  8. Mike mongeon wrote:

    Have you looked at your cell phone bill?? 1/4 of mine is taxes alone of some kind. Never mind gas for vehicles, property tax on vehicles…the list goes on and on.

  9. Will Ferullo wrote:

    I don’t think most people mind paying their fair share, but speaking for myself I hate seeing the WASTE. Things that could be taken care of simply are not, they require committees and sub committees, and committees to monitor the first committees, and so on. Also another HUGE problem that people are afraid to talk about, because somebody might get offended, is all the social spending that is out of control. Section 8 housing, EBT cards, fuel assistance, the list just goes on and on. Yet the people that recieve these benefits have big screen tvs, I phones, and X Box. But the working stiff will continue to get taxed and feed out his you know what.

  10. Curmudgeon wrote:

    Mark, how is this possible when gov’t figures show more than 3/4 of income tax comes from the top 1 or 2 percent of taxpayers? How is it possible that the low earners pay most of the taxes when nearly 50% of citizens pay no income tax at all?

    I suspect an increase in income tax of 1 or 2 percent on the bottom half of wage earners will produce a lot more revenue than a large increase on the top earners for the simple reason that there is a lot fewer of them than there is of us. This would probably be political suicide for the legislators with guts enough to follow the numbers.

    Government has grown huge doing things that are really not allowed by the Constitution. I think we need to trim the Feds back to what is actually allowed and leave the rest to the States to handle. If I want to see my State reps I can go to the capitol and usually find them to talk to. Fat chance of finding a Congressman or Senator to talk to.

    Keep the money spending power close to home so it can be more easily restrained by the voters if necessary.

  11. John Gresko wrote:

    Lets not forget, higher income earners pay capital gains which an hourly shop guy does not so it is not apples to apples comparison.Also, it is not a tax problem it is a ‘ spending’ problem as politicians keep inventing things to spend our money on. They also pay themselves more that I think they deserve and pay out unfunded liability for too high pensions.The people who work for the local or federal government have redifined their roles. It used to be thought of as a good job, steady with modest pay and a decent retirement, not crazy pay and lavish retirements. That was the trade off for the good , steady job. The last item would be to stop the insane entitlement mentality. Help those who need it and stop coddling those who just won’t work because their thumb hurts.

  12. Alan Blough wrote:

    Dave, your question is a lot more complex than it seems. If people would treat each other properly, a lot of government programs and agencies would disappear. For instance, unions were created to check the power of greedy, uncaring factory owners. If the owners would care enough about their employees, they would have safe, clean businesses or at least the workers would be given reasonable protection while working dangerous jobs:goodbye OSHA and MSHA and the EPA. The converse of that is that workers should be giving a full day’s work for a full day’s pay, not a quarter of a day’s work for extortionary wages. Why do we need public employee unions?
    I also agree with Howard: we just turned down a permanent improvement levy in our school district after being snookered into voting for six new schools and the renovation of the seventh. I am tired of being asked for money from the government and seeing no accountability and no discipline on how it it managed.

  13. Blue wrote:

    It is not any branch of governments job to make money. They can call it anything they want but if a branch of any government is collecting money, it is a tax. The government needs to learn to work within their means. Just like the ret of us.

  14. Riley Rasmussen wrote:

    First of all capital gains are not just paid by the “rich” also capital gains is money that has already been taxed so instead of thinking of it as a lower rate than the income tax the guy and the shop floor pays, think of it as a second tax you pay after paying income tax just like the guy on the shop floor but most likely at a much higher rate.

    The only way Americans will see better tax rates is when the Government stops spending like drunken sailors. The government does not have a revenue problem but rather a spending problem. If the senate wants to go back to Clinton era tax rates, the only way we could balance our budget is going back to similar spending. The fed takes in over a trillion more in revenue compared to Clinton years, but we are spending about 4 trillion more a year.

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