The Wisconsin Taxpayers Alliance (WISTAX) has come out with another good piece, this one focusing on what it calls “hidden taxes.”
In all likelihood most if not all other states have these types of taxes as well, but it is still interesting to note some of the ways consumers pay taxes without even realizing it.
According to WISTAX, both federal and state governments impose taxes on products that manufacturers include in the selling price, hidden from the consumer. These are different than the retail sales tax that customers see added to the price at the time of purchase.
For example, the federal government imposes a 10 percent tax on fishing poles and equipment and a 3 percent tax on tackle boxes and outboard motors—items a lot of folks around here are spending money on these days as the fishing season nears. These taxes are included in the retail price and are ultimately paid by the consumer. Revenues from them are returned to states to support fish restoration, aquatics education, and boating access. In 2016, $11.9 million of $361.1 million collected was returned to Wisconsin.
The feds also impose taxes on the manufacture of rifles, shotguns, and ammunition (11 percent); pistols and revolvers (10 percent); bows, quivers, and arrow tips (11 percent); and arrow shafts (49 cents each). Revenues are returned to the states for wildlife management, conservation, hunter education, and shooting ranges. In 2016, Wisconsin received $21 million of $695.1 million distributed by Washington.
The state also imposes taxes on alcohol and tobacco that are hidden in the price.
Most Wisconsinites do know about the gas tax. Included in the price of each gallon of gasoline is a 32.9 cents of state tax and an 18.4-cent federal tax. In other words, drivers pay more than 50 cents per gallon in gas taxes. In 2016, state collections alone totalled just over $1 billion.
Perhaps not as well known are taxes and fees on phone services. Wisconsin imposes a “Police and Fire Protection Fee” of 75 cents per cell phone and landline and 38 cents per pre-paid mobile phone. Despite its name, revenues are not used specifically for police and fire; rather, they supplement the county and municipal aid program.
How a person views government will determine whether or not they think the wool is being pulled over their eyes with some of these taxes. Keep in mind, however, that services have a cost. Trying to decide how much service to provide and how much to tax for it is government’s ongoing balancing act.
—Mark Sherry