excise tax

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excise tax

economics

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June 26, 2026

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An excise tax is a levy imposed on the sale, manufacture, or consumption of specific goods or services within a country. These taxes can be justified as "benefit taxes" for public services, like those on motor fuels, or as "sin taxes" to discourage consumption of items deemed harmful, such as alcohol and tobacco.123

Excise taxes can be based on the quantity of the product or its value. In the United States, they apply to both imports and domestic production, while in British terminology, they may only apply to domestic output. The burden of these taxes is typically passed on to consumers through higher prices, though suppliers and consumers may share the cost.3

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sales tax
Sales and excise taxes in various countries
Excise tax revenue in most countries comes primarily from excises on automobiles, motor fuels, tobacco, and alcoholic beverages. Many other special excises are in use, such as taxes on coffee, sugar, salt, vinegar, matches, and amusements. Historically, communist countries derived…
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Excise tax revenue in most countries comes primarily from excises on automobiles, motor fuels, tobacco, and alcoholic beverages. Many other special excises are in use, such as taxes on coffee, sugar, salt, vinegar, matches, and amusements. Historically, communist countries derived…
Read More

international trade
Nontariff barriers
Finally, excise taxes may act as a barrier to trade if they are levied at higher rates on imports than on domestic goods.
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Finally, excise taxes may act as a barrier to trade if they are levied at higher rates on imports than on domestic goods.
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glassware
England
…in 1777, which imposed a tax on the opaque white “enamel” glass, previously exempt.
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…in 1777, which imposed a tax on the opaque white “enamel” glass, previously exempt.
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taxation
Indirect taxes
By comparison, excises are levied only on particular commodities or services. While some countries impose excises and customs duties on almost everything—from necessities such as bread, meat, and salt, to nonessentials such as cigarettes, wine, liquor, coffee, and tea, to luxuries such as jewels and furs—taxes on…
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By comparison, excises are levied only on particular commodities or services. While some countries impose excises and customs duties on almost everything—from necessities such as bread, meat, and salt, to nonessentials such as cigarettes, wine, liquor, coffee, and tea, to luxuries such as jewels and furs—taxes on…
Read More