As I said to Doreen, I think it is a tax if it rasies revenue beyond the immediate cost of the service. And “covers the cost of road repair” would not be the immediate cost.
I mean, if this is a fee, then so is the tax on gas.
To the extent that there’s probably no bright line here, I think the thing that’s also important is that fair taxation is always progressive. Raising major revenue in the form of a fixed “administrative fee” that is the same for everyone for an is a back door way of imposing regressive taxation, where the cost is a much higher percentage of income for poor people. So regardless of the specific expenditure that might be associated with maintaining roads, etc., such fixed fees should always be kept to a minimum. It’s always fairer to fund major public expenditure out of general tax revenues that are raised progressively. Or, as I’ve said, through taxation of vehicles rather than licences, which can be structured much more progressively based on the number and value of vehicles and their emissions characteristics.
Okay, so it is the amount that makes it a tax. And, while I think I understand and have some sympathy for your position, I stand by my earlier position: that I am far more bothered by the unfairness of the driver’s license fee being so large in the first place than by the “unfairness” of offering a discount to those who pay several years at once.
Tend to agree. Service fee is for the service itself, tax or excise is for collecting revenue beyond just the service. That political types play word games to Not Call It Tax by subsuming it all into one same thing is just par for the course.
More to the basic point of “cheaper if you pay up front” in general, yes it disadvantages the person who does not have the cash flow, that much is obvious. But then determining whether this is something reasonable or abusive, an inconvenience or an injustice, can depend on many variables, including who is doing it.
I mentally bin gas taxes as more of a user fee than not, in that they’re very roughly proportionate to road use and thus maintenance costs. That’s assuming those taxes feed into a road fund as opposed to just going into the general revenue pool. I don’t know if that’s actually the case everywhere.
Running the DMV (or equivalent) has some cost that’s proportionate with use. I don’t know what that cost is. In Virginia, the price for a DL works out to something like $4/year, but that may very well be subsidized from the state’s general revenue. Which may be appropriate to avoid the regressive effect of user fees that others have mentioned.
ETA I believe my discount for registering my car for two years instead of one is only a dollar or two.
My claim was that if everybody paid the $200 for five years’ licensure once versus the $85 for one year’s licensure five times in five separate years, the bureau would eliminate 4/5ths of their total renewal workload. These savings in now unnecessary fixed costs to process 5x the annual transaction rate would be enough to more than fund the difference between 5 * $85 = $425 and the $200 they charge.
This same logic would apply whether the base price was 10x or 1/10th the quoted numbers. To be sure, the higher the base price, the more room for discounting.
All of which is a totally separate issue IMO between whether $85 for a year’s driver’s license is sensible or rip-off, a fee or a tax, or whether driving is a right or privilege
On “fees” and “taxes”:
IMO, all government revenue is a tax, by definition. To the degree the government is performing a direct and optional service in direct exchange for a particular tax payment, that payment can be construed as a “fee” which is a subset of the term “tax”. IMO “fee” is essentially the government word for “sales price of a product or service the citizen may choose to buy or not”.
If I use the city swimming pool and the pool is 100% funded by the price charged at admission, that’s a fee. If the pool runs at a surplus, where the collected admissions exceed the pool’s operating + capital budget for the year, the excess is a tax. If the pool is mostly funded by general revenue taxation and the admissions covers some lesser percentage of the operating costs, then the admission is a fee.
Many such fees are in fact a “nuisance fee”. Something intended primarily to reduce the total demand for an otherwise free product rather than to actually fund the operation and provide a meaningful price signal to the consuming public. Most rapid transit ticket prices are nuisance fees too; they cover a tiny fraction of the total operating and capital budget to provide the service.
IMO a driver’s license may have a legitimate fee attached to it of a couple to a few dollars per renewal, not per year. Anything cost above that level is a tax. A regressive tax.
Where I live, nuisance fees are common, excess (and highly regressive) taxation disguised as fees for mandatory or all-but mandatory government interactions are common, and in general the state operates on a “low headline taxes, low services, high fees” model. Which is deliberately highly regressive and all part of The Big Lie.
Driving as right vs privilege:
@Riemann is correct, @Dallas_Jones is wrong. I can’t say it better than it’s already been said.
There are in fact areas in the USA where driving might be a right not everyone needs to exercise. Manhattan island for example, but not much of the rest of NYC. But that’s a tiny fraction of the total US population. And those people there equally have the right. The absence of necessity does not restrict the nature of the right.
Like most other rights, even the US right to bear arms, this right is regulated in detail. The existence of regulations, including those which may deny the right to a specific named person for specific named reasons, does not prevent it from being a right.
I’m going to respond once more to clear up some very obvious fallacies you introduced, but I’ll probably have to pull the plug at this point before it derails the thread.
This is wrong not just on one but on two counts. First, as in my example of the federal tribunal that oversees appeals on aviation, marine, and railway licenses and certifications, one can seek redress if one believes one has been unfairly denied a privilege, not just when rights have been violated. Secondly, it’s quite common for such redress to be considered due process, so calling it “perverse” is rather bizarre:
Due process has also been frequently interpreted as limiting laws and legal proceedings (see substantive due process) so that judges, instead of legislators, may define and guarantee fundamental fairness, justice, and liberty.
No, the word is just there for emphasis. As I note below, my argument is just fine without it.
Sure. The Wiki article tries to make a distinction between “fundamental” or “inalienable” rights and legal rights established by statute. Personally I think the former smacks a bit too much of mysticism as all rights are ultimately defined by man and written on paper. But the important point is that driving a motor vehicle is neither a fundamental right nor a legal right, not merely in my opinion, but in the legal philosophy and jurisprudence of essentially all nations. For example, I trust the following should be clear enough for you:
Now that I’ve addressed your Wiki link, perhaps you’d like to explain how possession of a private or commercial pilot license or marine license to operate a vessel are also “rights”. Because it’s exactly the same thing in terms of qualifications, regulation, and licensing.
The problem here is that your definition of a “right” becomes so broad and amorphous that it no longer has any meaning. I get that there is a certain continuum of rights with some controversy around them, but to be meaningful, any actual right must be considered to be the default and must be protected by principles of strict scrutiny, meaning that it can be deprived only on the grounds of a compelling public interest.
If you’d rather shift your focus to the US, a few years ago some legal firms (primarily those representing drunk drivers) were making a big deal of the fact that a number of cases involving drivers refusing to submit to alcohol testing were making their way up to the Supreme Court, and proclaiming that soon we might have rulings declaring that driving was a right, based in part on the somewhat dubious logic of linking it to the right to interstate travel. The real objective, of course, was to get their drunk-driver clients off the hook. Three cases in particular attracted their interest: Birchfield v. North Dakota, Bernard v. Minnesota, and Beylund v. Levi.
Alas, it didn’t work out for them. In Birchfield (2016) which was a consolidation of three cases, the Supreme Court of the United States held that the search incident to arrest doctrine permits law enforcement to conduct warrantless breath tests (but not blood tests) on suspected drunk drivers, and included this reasoning (emphasis mine):
In the majority opinion, in addressing the limits of implied consent laws, the court stated that while their “prior opinions have referred approvingly to the general concept of implied-consent laws” that “there must be a limit to the consequences to which motorists may be deemed to have consented by virtue of a decision to drive on public roads” and “that motorists could be deemed to have consented to only those conditions that are ‘reasonable’ in that they have a ‘nexus’ to the privilege of driving”.
This characterization of my beliefs is the most absurdly wrong statement I’ve ever read. Uncritical reverence for the Constitution tends to be a characteristic of the American right and is pretty much the opposite of what I believe; I have frequently described the Second Amendment, for example, as the worst mistake the Founders ever made.
From your link:
As a citizen of Ontario it is your right to apply for and eventually obtain a driver’s licence, however this licence is a privilege to keep.
It is given upon completion of the specific tests, and graduating through the graduated licensing program. Now, with passing this process and obtaining an Ontario licence, it can just as easily be taken away for a number of reasons.
That is just the standard nonsense, claiming a qualitative distinction between rights and “privileges” that simply doesn’t stand up to scrutiny.
There no rights that are unconditional. Every right in the Constitution can be denied under certain circumstances. But they are still rights, because they can only be denied under fair and objectively specified conditions that are equal for everyone and subject to due process. It’s conceptually and functionally exactly the same for the right to drive, as you have said yourself.
For example, if you don’t follow certain rules you can (subject to due process) be sent to prison, where you lose the right to bear arms and (in the USA) the right to vote. If this bogus distinction between rights and “privileges” is valid, then these must be “privileges” too.
This is the issue. The problem lies with the black-and-white attitude that it it’s in the Constitution we must defend it to the death without even pausing to think about the merits, but if it’s not in the Constitution it doesn’t matter at all and people are on their own. Making the semantic choice to restrict use of the term “right” to narrowly mean “Constitutional right” reinforces this black-and-white thinking.
I think it’s the opposite: The hospital offers the discount so they get cash in hand immediately and can close the billing file. It’s like how insurance companies can negotiate substantial discounts with the hospitals because the hospitals know they’re going to get paid. What costs the hospital isn’t someone who immediately paid them 80% of the total but rather people who get charged $3,000 then spend the next seven years avoiding debt collectors.
Another example of this is doctor offices that give a discount for paying cash up front. I once spent a couple of months without insurance but had to take my kid to the doctor. The office said that, if I could pay cash at the desk, they could give me the same rate they give the insurance companies. If I was going to get billed after the fact, it would be the “regular” uninsured rate. The difference was probably a good 30-40% but, to the office, if I WAS insured, that’s what they would be getting and as long as they were guaranteed that amount, they didn’t care if it was in cash or from Blue Cross.
Poverty is the world’s most deadly disease.
Unfortunately, that’s not merely a bumper sticker saying, but the harsh conclusion from all history. As far back as good records exist, poor people led worse lives with less food, harder work, and inadequate care. Poor people had more children die at birth or within the first five years. Those who survived had shorter lifespans.
Industrialization is correlated with the concept of “rights” for all, part of the enlightenment. The U.S. and French revolutions proclaimed these “rights” in the abstract and failed to provide them in actuality. (Women have the right to vote? Ha.) Factories created a new set of wealthy families and an ever-expanding middle-class and a base of horrifying city slums. Slum dwellers died early etc. in poverty but their numbers created enough political power to grab for “rights.” (Women can vote. Yay.) Many of them rose out of poverty and into middle-class and felt they now shared in the textbook “rights”, although “rights” were denied in practice to many, ironically often by the risen middle-class.
I keep putting “rights” in quotes because no such things exist. Agreements. Conventions. Practices. Aspirations. Hypocrisies. The “right” to vote was denied at various times to non-citizens (blacks, Indians, Asians), women, men without property, poor people who couldn’t pay a Poll Tax, people who couldn’t pass a “competency” test designed to fail them, people under 21, people under 18, felons. Hell of a “right” you got there, fella.
Conversely, you most certainly have the “right” to die early if you live a life of poverty. Southern states have shorter life expediencies, a condition that is linked to worse medical care and the lack of federal pass-through money by states.
Of course the world is unfair to poor people. They have a loathsome disease that repels the wealthy. A cure is possible, but would require a massive reorganization of society. Everybody would be better off in the end, even billionaires. Mostly what’s needed is to stop treating the poor like we treated lepers. We need many more Father Damiens. Wait, he caught leprosy himself in the end. Never mind. Won’t happen. Nothing will change.
I misread the OP at first, and I was thinking I don’t think I’ve ever spent less than $100/annum. But I was thinking of car registration not license renewal. Here in California, license renewal is $53. It normally lasts five years.
Much cheaper than Oz.
Don’t get me started on registration fees. Again, exorbitant. In QLD where I currently live, the fee for a regular domestic vehicle is app $350 for 12 months. In VIC where I previously lived, the same car would cost $880.
In most of the USA, the yearly registration “fee” is moderate, say $50 to $100. But many states tack on a tax based on the nominal valuation of the car.
So in addition to paying a one-time sales tax (typically 6-7%) when you purchase a car, you’ll also pay something on the order of 1-2% of the then-current value every single year as a registration tax. The “good” news is that as your car’s value depreciates towards zero, so does the tax you’ll owe each year.
For folks who like driving snazzy new cars, the government-imposed fees can get hefty.
Of course, as in Oz this is a creature mostly of state, not federal regulation. As we have 50 states and some territories, we have at least 55 ways this stuff is done. So take my description as a fuzzy sort of average with outliers admittedly existing in all directions. And various local cottage industries set up to try to best arbitrage the governments’ tax and fee regimes.
Here in the socialist Marxist tyranny of Ontario, there has never been a value-based annual “tax” on license plate renewals (in our terminology, “registration” is a one-time event when you purchase a vehicle), only a flat annual fee. And I’m happy to say that in an act of socialist tyranny almost as egregious as the provision of free health care, the annual fee has now been eliminated altogether for all personal and light commercial vehicles. Renewal stickers are also now eliminated. Emissions checks were eliminated some years ago, on the grounds that they’re pretty useless for newer cars. So vehicle owners have no recurrent government-imposed fees at all. 
It’s amazing how sensibly a country can been run when you don’t need to lie to the populace about how they aren’t paying much in taxes.
That’s not a driver’s license fee. THIS is a driver’s license fee.
Fairness is in the eye of the beholder, but of course discounts for upfront payments screw over the poor. Most everything is worse for the poor. Less food, less medical care, higher costs for routine stuff, and less respect.
Yes, imho, government services with fees attached should be structured so their fees don’t differentially hurt the poor.
No, it is the purpose. If there was some reason that the marginal cost of renewing or printing a new license was really $200 a year, it would be a fee. But if the point of the charge is to raise revenue for other things, it is a tax.
Yes, that seems to be the crux. Colorado has TABOR, which means the legislature cannot raise taxes without going to the voters, so many things that have to be paid to the government are listed as “fees”. This has resulted in some court opinions on the difference between a tax and a fee.
Money paid to the government that is used to directly or indirectly benefit the thing being paid for is a fee. Pay to get into a state park? That’s a fee, because the money is used to support and maintain the parks. Even when the money (is now) collected when registering your car, it is still a fee, because the park permit money goes to the parks.
Any money paid to the government that goes into the general fund, or is used for something other than the thing it is collected on is a tax. A percentage added to retail sales that goes to the fire department? That’s a tax, because the fire department isn’t related to what was purchased.
Those are two clear cut examples, but the state supreme ruled on some trickier ones, such as are certain costs associated with filing business paperwork taxes or fees. They ruled they are fees, because the money collected stays in the government department that collects the paperwork, and is used for administrative purposes.