2007-09-09 19:24:48 · 7 answers · asked by Mane 3 in Business & Finance ➔ Taxes ➔ United States
Excise tax use to be called Luxury tax. Today it is pretty much duty tax. It's usually set up to protect local businesses from begging under cut by people making the same product in a country that can do it much cheaper. More or less an import tax.
However, back to the Luxury Tax. In the old days people that bought a car or boat was charged more money for the expensive stuff... also jewelry. The idea that is you were real rich you would buy a Rolls or a Yacht, but the little guy would buy a Chevy or fishing boat. The tax dramatically escalated as the price went up since rich people could afford it more.
Simply a way for the government to charge more taxes on people that had more to spend on things that isn't a necessity. Hence car tax for a new car is usually called excise tax.
2007-09-09 19:31:51 · answer #1 · answered by Anonymous · 2⤊ 4⤋
There is no certain "excise tax". There are many.
An excise tax is just what it sounds like...something added on.
It could range from tobacco to gas. Some states even base the amount of a car tag on the value of the car. All of these are excise taxes.
At one time they were called sin taxes...because it was only applied to the extras in life...but that has changed. An example is if you drive a vehicle that weighs over 6000 lbs. ,in Florida, you pay an excise tax for the privielge.
2007-09-10 04:31:55 · answer #2 · answered by Russ B 6 · 1⤊ 0⤋
An excise tax is simply a hidden tax that is built into the cost of a product. The Federal government and virtually all states levy excise taxes on tobacco, alcoholic beverages and gasoline for example. Many other items are subject to various excise taxes. For example there is an excise tax of 10¢ per pound for the rubber used in tires.
Excise taxes are usually levied early in the supply chain or manufacturing cycle.
2007-09-10 02:46:49 · answer #3 · answered by Bostonian In MO 7 · 2⤊ 0⤋
The best way to explain an excise tax would be that it is an added tax on certain goods. Like if your state has 3% sales tax, but they want to discourage smoking so they bump up taxes on a pack of cigs to 10%. That extra 7% would be an excise tax. Basically its a tax the state/federal gov. can impose on whatever they want if a bill can pass to get it through.
2007-09-10 02:43:18 · answer #4 · answered by alfonsopaul 2 · 0⤊ 0⤋
I've attached a link to Wikipedia about excise taxes and also a link to the IRS about excise taxes.
2007-09-10 09:29:38 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Excise tax is a tax on special privilege granted by the government to individuals. For example, the sale of cigarettes was controlled and minimize by government for it is hazardous to health but then you are granted an authority to sale them, you are to pay a separate tax called excise tax. Also discourage by the government are sale of liquor, tobacco, and import as they are harmful to health, environment and economy. This cannot be eliminated but was minimized and controlled by imposing a heavier tax rate compared to other trade.
2007-09-10 04:56:41 · answer #6 · answered by Asteria 2 · 0⤊ 2⤋
The first response is to say it's a rip-off. Usually it applies to goods imported but also in some countries to what could be called duty.. Alcohol, petrol etc.
2007-09-10 02:32:42 · answer #7 · answered by Ted 3 · 0⤊ 0⤋