California Gov. Arnold Schwarzenegger (R) is proposing a new insurance surcharge to plug a budget gap that conservative critics are calling a tax. And objectively speaking, it really is a tax. But the L.A. Times was careful to avoid attributing the T-word to the idea.
Here's the teaser from the Times Web site's front page:
Plan calls for 1.25% assessment on all residential and commercial property policies to fund firefighting. Foes call it a tax.
Here's the header, subhead, and lede from the January 9 article:
Gov. urges insurance assessment to fund firefighting: Plan calls for 1.25% levy on all residential and commercial property policies. Foes say it is a tax.
SACRAMENTO -- Gov. Arnold Schwarzenegger will propose hiking the cost of insurance for millions of California homes and businesses in the budget he unveils Thursday, with the money to be used for firefighting efforts.
LAT Staffers Marc Lifsher and Evan Halpe later explained in their article that the controversy over the tax is far from an issue about semantics, it goes to Schwarzenegger's chances of passing the measure through the state legislature:
A fee can pass the Legislature on a simple majority. A tax requires a two-thirds vote, which would have to include Republican support -- something GOP lawmakers have traditionally withheld on new taxes.
To split the difference between calling it a tax or a fee, Lifsher and Halpe settled for "levy":
The levy is the latest to be championed by the governor. Last fall, Schwarzenegger signed a bill that raised California drivers' registration payments by as much as $11 to pay for research on alternative fuels. And his healthcare plan relies on new taxes on tobacco users, hospitals and employers.
—Ken Shepherd is Managing Editor of NewsBusters
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So the question is does
January 9, 2008 - 13:44 ET by dscottSo the question is does levying a charge for the fire fighting fund constitute a tax or a fee? The difference between a fee and a tax is that a fee is voluntary, a tax is compulsory. You can choose not to engage in the activity and thus not pay/avoid the fee, whereas you can not avoid a tax. Here is a nice presentation on it: http://truman.missouri.edu/uploads/Publications/MLA%2012-2004.pdf If you are a rentor (residential) or lease holder (commercial), you indirectly pay the fee as it is passed on to you by the landlord, since the landlord is the one responsible to pay the charge. Since virtually everyone either owns or rents unless they are homeless, they must pay the charge directly or indirectly, respectively and the end result is everyone pays the charges hence it should be called a TAX. However, being the Law is about parsing the gnats to swallow camels for the benefit of those in power, they will in all proability get away with calling it a FEE.
This should also draw attention to the fact that this charge essentially will allow legislators to offset money currently being spent on fire fighting and thus allow this freed up money to plug other holes in the budget in a clever shell game. Tell us, are they proposing to do more fire fighting, buy more equipment with this extra money as in increasing the fire fighting budget? If not, then it is a shell game.
Hanlon's Razor: Never attribute to malice that which can be adequately explained by stupidity. dscott's corollary: The line between malice and stupidity is called depraved indifference.
I believe a fee has more to
January 9, 2008 - 14:32 ET by Ken ShepherdI believe a fee has more to do with purchasing the services of a govt. agency at cost or to subsidize that agency's tax revenues.
For example, I go to a state park in Maryland, I pay an entrance fee. It's not a tax.
But if, when I buy a bike a surcharge is tacked on to the sales tax supposedly to be earmarked for bike trail maintanence in state parks, that's a tax.
Hmmm, yes, it is a
January 9, 2008 - 17:26 ET by dscottHmmm, yes, it is a complicated nuanced issue, however, I think the bike surcharge is another kind of tax as opposed to a fee. Just because you own a bike doesn't mean you will use the bike trails provided, thus it is complusory not voluntary. In your example, a user fee is charged at the park entrance for people with bikes, the charge is voluntary based on whether you use the park or not. A sales "tax" like the one in MD is charged to virtually everything in this case bikes, except for food (maybe even clothing) I believe. A "surcharge (tax)" is a tax specifically levied on a specific item or service in addition to the sales tax (like cigarettes) and may or may not be designated for a specific purpose. At least that's my understanding.
Hanlon's Razor: Never attribute to malice that which can be adequately explained by stupidity. dscott's corollary: The line between malice and stupidity is called depraved indifference.
try preventing the fires in the first place
January 9, 2008 - 14:35 ET by wizardjrIn typical liberal fashion, we're going to spend billions fighting fires that shouldn't have occurred in the first place! Everyone knows, but no liberals will admit, that the horrendous fires were the result of dirt worshippers preventing the state and feds from allowing small burn-offs and doing brush clearing. After tying things up in court for nearly 20 years the fire fuel built up to a critical mass and then nearly burned SoCal to a crisp. Duh!
We need to let them all go to the zoo and pet the tiger. ;-))