excise taxes an indirect tax charged on the sale of a particular good (usually by units of the...

Excise Taxes

• An indirect tax charged on the sale of a particular good (usually by UNITS of the product rather than a percentage of the cost)

• Thus, an excise tax is measured by the amount of business done.

• It is not paid DIRECTLY by the buyer, but INDIRECTLY through a tax charged to the seller (who presumably passes the cost along to the buyer).

Current Gasoline Tax Rates

Pennsylvania• 31.2 cents/gallon (state)• 18.4 cents/gallon (federal)• 49.6 cents/gallon (total)

Lowest total (federal + state): $0.264 (Alaska)Highest total (federal + state): $0.791 (California)

New Jersey• 14.5 cents/gallon (state)• 18.4 cents/gallon (federal)• 32.9 cents/gallon (total)

Cigarette Taxes

• Missouri: $0.17/pack• North Carolina: $0.45/pack• Pennsylvania: $1.60/pack• New Jersey: $2.70/pack• New York (state) $4.35/pack• New York (city) $5.85/pack

• Federal: $1.01/pack (before 2009 it was $0.39/pack)

Cigarette Taxes

• In a 2012 study conducted on behalf of the New York State Department of Health, it revealed that low-income smokers (those in households making under $30,000), spent an average of 23.6% of their annual household income on cigarettes, compared to 2.2% for smokers in households making over $60,000.