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Comment by fc417fc802 | Hacker News Reader

I'm in agreement with your position but I'm confused by the SCOTUS criteria for distinguishing taxes and fees. I follow the reasoning that you receive a tangible benefit as an individual for payment of a fee. That much makes sense to me. However what puzzles me is "By contrast, ‘taxes’ are expected to ‘inure[] to the benefit’ of the wider public." Do not fees also benefit the wider public to the extent that they fund the government? I'm failing to see any difference in that regard.

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Whether it is a fee or tax is less about whether it funds the government and more about whether when you pay the amount you get some benefit that you wouldn’t if you didn’t pay (above and beyond compliance with tax law). For example a fishing licence is a fee while a flood levy is a tax.

Yes, I understood that (and stated as much). The first part made sense to me. It is the second that I find perplexing.

> By contrast, ‘taxes’ are expected to ‘inure[] to the benefit’ of the wider public.

That seems to apply to both taxes and fees as far as I can tell. It seems to me that a tax can primarily be distinguished by virtue of not qualifying as a fee. Put another way, are not fees paid to a government a subset of taxes much as squares are a subset of rectangles?

But then sales taxes are fees, no?

It does all seem a bit arbitrary doesn't it? If you frame it as purchasing the privilege of purchasing a certain quantity of arbitrary goods denominated in dollars then it sure looks like a fee. But obviously that isn't what is meant.

At the end of the day shall-issue permits, hyper specialized taxes, and fees all seem to amount to the same thing. However I think you can probably construct a reasonable criteria based on whether or not the other side of the transaction is fulfilled by the government and whether or not it is legal to do the thing by default. By that logic sales taxes and car tabs would indeed be taxes while fishing and camping permits would both be fees.

No, because the government collecting sales tax isn't a party to the transaction. The fee itself needs to be in exchange for a good, but the government is giving you anything marginal in exchange for sales tax, instead it's going into accounts spent for public good.

When you pay income tax (for example), your personal benefit from that tax is no different from my benefit from your income tax. But if you pay a passport fee (for example), you receive a specific benefit that I do not.

Very sharp reading. My quotation presents the two definitions as freestanding. But as you observe, the definition of “tax” isn’t freestanding. There’s additional context, which comes from the fact that this issue only comes up when you’ve got a payment that purports to be for some government benefit. If the government imposes a payment on you in return for nothing then that’s clearly a tax. So, for example, the ACA penalty on uninsured people was a tax.

By contrast, if the government is purporting to charge you a fee in return for some benefit, that can still be a tax when the benefit that you’re getting really is a benefit to the public at large. So you’re comparing the benefit of what you’re supposedly paying for to the benefit to the public at large for operating the government. An example would be the case that alleged that PACER fees for operating the electronic court filing system were impermissible taxes. There, what you’re paying for is putatively access to a specific document. But the cost is ($0.10 per page) is way out of line with how electronic access to documents is normally valued. What you’re really paying for is the existence of the electronic filing system itself, which is something that inures to the benefit of the public at large.

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