Question

Financing government services through user fees generally leads to a debate/comparison of fees v. taxes. Please describe and define a fee and a tax, identifying the significant differences between the two. What are the three factors that determine what a fee should be? PLEASE provide examples to support your analysis.

Answer 1

There is a difference between government- imposed tax and fees charged by the government. User Fee means when the payment is made by the person who accessed a specific service and takes some certain benefits, however, taxes are mandatory for everyone disregarding the welfare they want to access or not. Payment of user fee means or paid when someone wants to take a specific service, but taxes are imposed on everyone they should pay the taxes. For example, an individual pay a fee for an education service this service is only bound to those who want to access this service, and an example of paying tax for the property maintenance or facility, should be paid by everyone.