Excise Taxes

Excise taxes are levied on many different products for several different reasons. What is the purpose of an excise tax? Is there more than one reason that excise taxes are levied? Upon what products are excise taxes levied? Does levying the tax on these specific goods achieve the desired goal?

The article Excise Taxes on New Cars discusses two different excise taxes that are levied on new automobiles.

Why do you think the "gas guzzler" tax was originally imposed?
Do you think this tax achieves its desired goal? Why or why not?
Why do you think the luxury tax was originally imposed? When is this tax scheduled to expire?
Do you think this tax achieves the desired goal? Why or why not?

Drivers must purchase gasoline in order to drive their automobiles. The federal government as well as state governments levy excise taxes on this petroleum product. According to the article The Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History

In what year was the first excise tax levied on gasoline? By which state?
In what year did the federal government first levy an excise tax on gasoline?
What was the purpose of these early gasoline excise taxes?
Do you think these taxes achieved the desired goal? Why or why not?
What is the current (2001) federal excise tax on gasoline?

In addition to the federal excise tax on gasoline, states levy their own excise taxes on gasoline. According to State Gasoline Taxes:

which state imposes the highest gasoline excise tax? What amount of tax is levied by this state?
which state imposes the lowest gasoline excise tax? What amount of tax is levied by this state?

Government also levies excise taxes on tobacco products. According to TOBACCO EXCISE TAXES what benefit(s) will be derived from levying an excise tax on tobacco products?

Do you believe the excise tax is achieving the desired result? Why or why not?

As with gasoline taxes, states levy their own excise tax on tobacco products. According to STATE EXCISE TAX RATES ON CIGARETTES:

which state imposes the highest excise tax on cigarettes? What amount of tax is levied by this state?
which state imposes the lowest excise tax on cigarettes? What amount of tax is levied by this state?
Do you think there is a reason for these particular states levying the highest and the lowest excise tax on cigarettes, respectively?

At the same time government is imposing an excise tax on tobacco products, FEDERAL SUPPORT FOR TOBACCO states that the federal government is supporting tobacco production. Why do you think government supports tobacco farming?

Finally, government levies taxes on alcoholic beverages. Although the History of Federal Excise Taxes on Beer web page is sponsored by a decidedly biased source, when were excise taxes originally placed on beer? Why? Do you believe this is the same reason excise taxes are levied on alcoholic products today? Why or why not?

According to the companion web page The Tax Burden on America's Beer Drinkers what portion of the retail price of beer is represented by taxes? In comparison, what portion of the retail price of other products is represented by taxes? Why do you think this is the case?

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Last updated February 10, 2001

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