Governments apply excise taxes to private market transactions. User fees, on the other hand, are costs associated with a publicly owned good. While some user fees are calculated in accordance with the perceived cost of a good or impact (bringing an RV into Yosemite costs more than driving in a scooter), these fees are unlike ad valorem taxes because they involve access to state-owned assets or services. When a citizen pays a user fee to obtain a drivers license, he is essentially re-paying for access to roads that have been built with his money.
An Excise Tax is Not a User Fee
BySouth Carolina Policy Council
Feb 28, 2008
By South Carolina Policy Council
Since 1986 the South Carolina Policy Council Education Foundation has advocated innovative policy ideas that advance the principles of limited government and free enterprise. The Policy Council is the state’s meeting place for business leaders, policymakers, and academics – as well as engaged citizens – who want to see South Carolina become the most free state in the nation. For questions or comments on the articles on this website, please email Research Director Jamie Murguia.
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