4 ms·

in german law a tax is general purpose, government can use the money to pay for any of their "services". whereas a fee has a specific purpose and cannot be used

in german law a tax is general purpose, government can use the money to pay for any of their "services". whereas a fee has a specific purpose and cannot be used for anything else.

mirimir 9y ago
It's the same in the US. For example, there's a fee for getting a passport, and it's not considered to be a tax.
- nybble41 9y ago
  That's not the same, though, because it is not mandatory to obtain a passport (at least not for everyone—you may need one if you want to travel abroad, but this is viewed by the government as a non-essential privilege and not a right). Broadly speaking, in the US, a "fee" is something you pay in order to receive some form of optional service, such as the issuing of a passport, and a "fine" is something you are ordered to pay as a penalty for breaking the law. Everything else—any payment required of a law-abiding citizen either for simply existing or as a condition for carrying out law-abiding actions (e.g. owning property, earning income)—is a tax. Of course, sometimes fees and fines can be seen as "stealth taxes" when they intrude too far into everyday life, particularly when state monopolies are involved. For example, the cost of First Class postage with USPS is technically a fee for an optional service, but the USPS monopoly on First Class letter delivery makes it at least partly a tax, to the extent that another carrier might have provided the same service for a lower price in the absence of the monopoly.
  - mirimir 9y ago
    I was going to say driver's license. But I guess that's optional too. There are garbage fees or charges. Sometimes you must pay them, even if you contract with a private hauler. But you need that to get an occupancy permit. Also water/sewer fees. Unless you have a well and septic system.
    - nybble41 9y ago
      Right, the line does get rather blurry when a service provider has the power to compel people to purchase their "service" whether they want to or not. Local governments like to position such payments as "fees"—it makes for better PR—but if there are penalties for opting out (such as not being permitted to occupy your own property) then I would consider it a tax. In the cases you mentioned, for example, there really isn't any significant difference between those mandatory utility "fees" and property taxes.
      - mirimir 9y ago
        > but if there are penalties for opting out (such as not being permitted to occupy your own property) then I would consider it a tax. I agree. But I'm guessing that it's the same in Germany. They call them "fees" but they're really taxes. Except that they can't be used for other purposes.
      - Xylakant 9y ago
        There is a substantial difference between fees and taxes. Fees are tied to something specific. This has two implications: First, they cannot be used for something else. Second: The height of the fee must not exceed the cost of the service and thus is at least in principle something that can be checked. For example, some public health insurance providers in germany had excess money and they had to refund that to their customers. Taxes are under no such regime. It may seem like one is like the other, but it’s really an important distinction.
        nybble41 9y ago
        > Fees are tied to something specific. ... they cannot be used for something else. ... The height of the fee must not exceed the cost of the service.... In Germany that may be true, but I was speaking of the US, where the terms are used differently. There is no expectation here that "fees" can only be used to defray the cost of providing specific services.

in german law a tax is general purpose, government can use the money to pay for any of their "services". whereas a fee has a specific purpose and cannot be used for anything else.

mirimir 9y ago

It's the same in the US. For example, there's a fee for getting a passport, and it's not considered to be a tax.

nybble41 9y ago
That's not the same, though, because it is not mandatory to obtain a passport (at least not for everyone—you may need one if you want to travel abroad, but this is viewed by the government as a non-essential privilege and not a right). Broadly speaking, in the US, a "fee" is something you pay in order to receive some form of optional service, such as the issuing of a passport, and a "fine" is something you are ordered to pay as a penalty for breaking the law. Everything else—any payment required of a law-abiding citizen either for simply existing or as a condition for carrying out law-abiding actions (e.g. owning property, earning income)—is a tax. Of course, sometimes fees and fines can be seen as "stealth taxes" when they intrude too far into everyday life, particularly when state monopolies are involved. For example, the cost of First Class postage with USPS is technically a fee for an optional service, but the USPS monopoly on First Class letter delivery makes it at least partly a tax, to the extent that another carrier might have provided the same service for a lower price in the absence of the monopoly.
- mirimir 9y ago
  I was going to say driver's license. But I guess that's optional too. There are garbage fees or charges. Sometimes you must pay them, even if you contract with a private hauler. But you need that to get an occupancy permit. Also water/sewer fees. Unless you have a well and septic system.
  - nybble41 9y ago
    Right, the line does get rather blurry when a service provider has the power to compel people to purchase their "service" whether they want to or not. Local governments like to position such payments as "fees"—it makes for better PR—but if there are penalties for opting out (such as not being permitted to occupy your own property) then I would consider it a tax. In the cases you mentioned, for example, there really isn't any significant difference between those mandatory utility "fees" and property taxes.
    - mirimir 9y ago
      > but if there are penalties for opting out (such as not being permitted to occupy your own property) then I would consider it a tax. I agree. But I'm guessing that it's the same in Germany. They call them "fees" but they're really taxes. Except that they can't be used for other purposes.
    - Xylakant 9y ago
      There is a substantial difference between fees and taxes. Fees are tied to something specific. This has two implications: First, they cannot be used for something else. Second: The height of the fee must not exceed the cost of the service and thus is at least in principle something that can be checked. For example, some public health insurance providers in germany had excess money and they had to refund that to their customers. Taxes are under no such regime. It may seem like one is like the other, but it’s really an important distinction.
      - nybble41 9y ago
        > Fees are tied to something specific. ... they cannot be used for something else. ... The height of the fee must not exceed the cost of the service.... In Germany that may be true, but I was speaking of the US, where the terms are used differently. There is no expectation here that "fees" can only be used to defray the cost of providing specific services.