Which of the following is NOT a characteristic of an excise tax?

The correct answer identifies "broad-based tax" as not being a characteristic of an excise tax. An excise tax is specifically designed to be levied on particular goods or activities rather than applied widely across a broad base of products or services.

Excise taxes are often imposed on specific items such as alcohol, tobacco, and gasoline, making them more selective in nature. This means they target consumption of specific goods rather than encompassing a wide array of financial activities or consumption in general, which would be more characteristic of broad-based taxes like sales taxes or income taxes.

Additionally, excise taxes are categorized as consumption taxes because they are paid by consumers when they purchase the taxed goods. While they do focus on particular activities (like the purchase of certain items), their imposition on specific goods differentiates them from more universal tax structures. Consequently, "broad-based tax" does not accurately describe excise taxes, reinforcing the correctness of the selected answer.