Excise taxes are per-unit taxes on specific goods, such as cigarettes, alcohol, gasoline, and luxury items. They are not income taxes or profits taxes, and they are not based on sales revenues. They are also not the second most important source of federal revenue, as they account for a relatively small share of total tax revenue.

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Excise Taxes Are

Question 55

Multiple Choice

Excise taxes are

A) really income taxes in disguise.
B) profits taxes on major corporations.
C) per-unit taxes on specific goods.
D) percentage taxes on sales revenues.
E) the second most important source of federal revenue.

Correct Answer: