As the activities of the state expanded, and the means by which it had been self-supporting were either given up or disappeared, a greater amount of reliance for support continually had to be put upon the individual. In order to justify this in the mind of the contributor, the attempt was usually made to show some special benefit which he was receiving from the state because he made the expenditure. While much of the revenue of the modern state is in the nature of taxes, yet special payments for special benefits still form an important class. One outstanding example is the fee.

Definition of Fee. - In some respects fees are similar to taxes. In both cases the levy is primarily for the public good. The state fixes the amount of the fee, as well as the amount of a tax. A tax is a compulsory levy, while the fee is largely so. The outstanding difference, however, is that, while the payment of the fee does aid in carrying on a state function for the common good, the state at the same time gives some special benefit to the individual who makes the payment. A fee might be defined, then, as a semicompulsory levy for some benefit, undertaken primarily for the public good, which also confers some benefit on the individual who makes the payment.

Examples of Fees. - Examples of fees are numerous. The varied use of court fees at once presents itself to mind. Courts are maintained for the purpose of establishing justice, yet the individual who avails himself of the service receives a benefit and is charged a fee. The recording of deeds and mortgages, and the issuing of marriage licenses, are undertaken for the public good, yet a charge is made to the individual who records a deed or mortgage or who secures a license.

Many of our so-called taxes are simply fees. Most license taxes are of this nature. The members of various groups of labor must secure licenses to follow their trade legally. Such are taxicab drivers, teamsters, engineers of various sorts, and peddlers. The state has recognized that the welfare of society demands some regulation of these occupations. It has been found that the individual under regulation has been willing to pay for the privilege of carrying on the activity. The sale of liquor is an example of an industry which was extensively regulated by the use of the license or fee payments. In such cases the proprietor of the business is often anxious that the fee be high, so that his marginal competitors be driven out of business and leave the situation more nearly a monopoly. Under such a condition those remaining in business may more than recoup themselves for the fee paid, by the increased prices and trade. It is to the social interest to keep track of the owners of motor cars, and a license must be secured for which a fee is charged before it becomes legal to operate a car. Dog taxes are of the same nature. A profusion of worthless dogs is recognized as a nuisance, and an attempt is made to keep down numbers by levying a tax upon every dog.

A group of persons may wish to be recognized legally as an individual, and a charter is granted by the state which makes them a corporation. For this service a fee is charged which varies in the different states. Numerous other examples of fees might be given, and many others will occur to the reader. The ones given, however, serve to show the wide extent of the use of fees, and the various purposes which they serve.

Fees Semicompulsory. - These examples illustrate the semicompulsory nature of the fee payment. It can be seen that, while the levy is determined by the public authority, it is only paid when the individual avails himself of the benefit with which the fee payment is connected. That is, if the individual does not avail himself of the benefit no payment is made, but the payment is compulsory if the benefit is used. When the state enacts a statute that every driver of a taxicab must secure a license, for which a fee will be charged, it does not thereby compel any individual to become a driver, but if he secure the privilege to enter this form of obtaining a livelihood he must pay the fee. Neither does the law compel any individual to own a dog, yet if anyone desires to own a dog he must pay for the privilege. Again, a group of individuals could enter business under the partnership form of organization, but if they want the privilege of existing and being known as a corporation, they must pay a fee to the state for granting the privilege.

The degree of compulsion varies greatly, then, according to the desirability or necessity of the service which is undertaken. It is sometimes said that in this sense taxes are not compulsory. For example, if a man does not want to pay taxes on his farm he may sell the farm; if he does not want to pay them on income he can cease getting an income. In the first case, the tax on the land would be paid no matter how many sales occurred, and in the second the giving up of an income is highly improbable. The degree of compulsion in all taxes is not the same, neither is it for fees. It may be true that some fees are more compulsory than some taxes, yet in general fees represent a less compulsory form of revenue.