State Needs More Revenue? Why Not Tax a Tax?

Colorado, like every other state in the nation, is struggling with revenue.

So what’s a state to do? Well, let’s see, the state already taxes income, gas, sales on goods, personal property, corporate income, entertainment, energy, phones, etc. All that’s left to do is…tax a tax.

Never happen you say?

Coloradans must pay a $1.50 waste-tire fee every time they dispose of an old tire at a retail outlet. And according to an “FYI Memo” from the state department of revenue, “Effective August 5, 2009, the waste tire recycling development fee is considered part of the purchase price and is subject to sales tax.”

Based on the revenue of the waste-tire fee from previous years, this means the state and other sub-governments could collect a grand total of anywhere between $300,000 to $500,000…all because they are taxing a fee.

“I realize $300,000 isn’t a scandal to most people,” says Jon Caldara of Colorado’s Independence Institute, a free-market think tank. “But if we don’t stop this practice of placing sales taxes on fees now, then it won’t be long until the state is collecting millions, for nothing. It makes me wish the Beatles could add just a couple of lines to the song, ‘Taxman.'”

The full story is available here at the Independence Institute’s website.