What is another name for an excise tax?

Prepare for CGFM Exam 1 – Governmental Environment. Utilize flashcards and multiple-choice questions with explanations and hints. Ace your exam!

An excise tax is often referred to as a sin tax because it is typically imposed on specific goods and activities that are considered harmful or undesirable, such as tobacco, alcohol, and gambling. The idea behind this type of taxation is not only to generate revenue for the government but also to discourage consumption of these goods due to their negative societal impacts. By labeling it a "sin tax," it reflects the policy intention behind the taxation strategy.

Other types of taxes mentioned may serve different purposes or apply to different contexts. For instance, an estate tax is imposed on the value of an individual's estate upon death, a use tax is levied on the use of goods that were not subjected to sales tax, and a property tax is based on property ownership. Each of these taxes has specific implications and applications, which distinguishes them from excise or sin taxes that focus on consumption of specific products.

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