September 28, 2009
Slate.com Interviews Tax Foundation Tax Counsel Joseph Henchman on Taxes vs. Fees
"Tax Dodging: Why it matters whether we call the health insurance penalty a 'tax' or a 'fee'"
By Christopher Beam
Last week, President Obama found himself caught up in Washington's favorite word game. The rules: Find as many ways as you can to describe your taxlike policy without using the word tax. ...
Yet there is a generally accepted definition of taxes vs. fees, says Joseph Henchman of the Tax Foundation: Taxes are used to fund services for everyone. Fees compensate the government for services that benefit a particular group. "The question is what the revenue is for," Henchman says. "If it goes for providing services for the general public, then it's taxlike. If it's to compensate for the costs of punishing individuals for not buying insurance, then it's feelike." The Baucus bill would use the payments to help subsidize coverage for the uninsured, which Henchman says would make it more "taxlike."
