What do we call a charge imposed on individuals who specifically benefit from a good or service?

Prepare for the CGFM Exam 1 with flashcards and multiple-choice questions. Each question comes with hints and explanations to help you understand. Ace your exam by studying the key concepts of the governmental environment!

The charge imposed on individuals who specifically benefit from a good or service is referred to as a user fee. User fees are designed to fund specific services provided to individuals or groups who directly benefit from those services. Unlike general taxes that are levied on a broad base to fund various public goods and services used by the entire community, user fees are typically aimed at covering the costs associated with particular services, such as park entry fees, tolls for road usage, or fees for water supply. This approach ensures that those who utilize the service contribute to its provision, thereby promoting accountability and efficiency in government spending.

Other options, such as a use tax, are generally levied on goods purchased outside the jurisdiction but used within it, and do not specifically relate to services that provide direct benefits. A wealth tax is a tax based on an individual's net wealth, and a service tax typically refers to a tax levied on services provided, rather than a fee for direct user benefits. Hence, user fee stands out as the most appropriate term for charges incurred by individuals benefiting directly from a service.

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