Another Tax Masquerading as a Fee?

Another Tax Masquerading as a Fee?

October 1, 2007 Posted by J. Scott Moody - 1 Comment

The Portland Press Herald today ran a story on the new $1 fee levied on oil changes in Maine. The money from the fee will be used to clean-up contaminated waste-oil sites throughout Maine.
The purpose of the fee is clear, but what is not clear is why this is being called a “fee?” Fees are something we pay when there is a direct good or service being provided. For instance, I may pay a park entrance fee in order to enjoy the beauty and serenity of the park. However, what good or service am I getting for this “oil change fee.” Sure, I will derive some minuscule benefit of a cleaner environment, but I doubt that I will ever visit the cleaned-up sites in person.
One useful analogy is to look at the “gas tax.” I pay the gas tax every time I go to the pump, yet it is unlikely I will ever derive the full benefits of the taxes I pay. There will be roads built and maintained in Maine that I may never see or use but I still helped pay for their construction. Whenever, funds are used to benefit society in a general manner, the funds used are extracted by a “tax.” This “oil change fee” fits the analogy of the “gas tax” more so than the “park entrance fee.”
My final conclusion is that is an “oil change tax.” Perhaps I will follow-up on this later to see how the U.S. Census Bureau defines this as a tax or fee . . .