Stealth Taxes

March 19, 2010

Ever since Walter Mondale was pilloried in 1984, it's been the rare politician who makes a stand for higher taxes. Even President Obama sold his program during the campaign as lowering taxes for all but high-earners.

We at the Tax Foundation work a lot on tax definition issues, and I often argue that it's important for two reasons. One, many states have stricter legal requirements for tax laws (multiple readings, public votes, etc.), so a firm definition is important. Two, Americans are more skeptical of things labeled "tax" than other revenue proposals, a skepticism that dates before the Founding of the Republic.

Maybe not just Americans. An excellent New York Times piece lists some stealthy taxes being proposed both here and abroad:

  • France has introduced taxes on crustaceans and mollusks to pay for diesel fuel subsidies for fishermen.
  • A higher airline tax in Britain will go to the general fund, despite rhetoric that it would further environmental efforts. Also there's a "horse tax" proposal that I don't fully understand.
  • Northern Ireland increased the cost of dog licenses ten-fold.
  • The article notes that average VAT (sales tax) rate in the European Union rose to 19.8% in 2009, up from 19.5% in 2008.

Full article here.

Have you come across examples of stealth taxes? Send them to me at henchman [at]

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A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.