Marco decided to write down all his expenses for one day.He had a lot of errands: he filled his car with gas,and he did his grocery shopping for the week,including items to host a TGIF party with beer,wine,and soda.Even though Marco is trying to cut down on his smoking,he did buy a carton of cigarettes.Every time he paid a tax,he recorded it,so his notes include both the words "sales tax" and "excise tax."
Required:
What is the difference between excise taxes and sales taxes?
A)Sales taxes are levied only on certain items in specific stores.
B)Excise taxes are calculated as a percentage of the base price.
C)Excise taxes can limit sales and reduce product demand.
D)Sales taxes are included in the base price of products.
E)Sales taxes and excise taxes are terms for the same levy.

Question

Marco decided to write down all his expenses for one day.He had a lot of errands: he filled his car with gas,and he did his grocery shopping for the week,including items to host a TGIF party with beer,wine,and soda.Even though Marco is trying to cut down on his smoking,he did buy a carton of cigarettes.Every time he paid a tax,he recorded it,so his notes include both the words "sales tax" and "excise tax." ​
​Required:
What is the difference between excise taxes and sales taxes?
A)​Sales taxes are levied only on certain items in specific stores.
B)​Excise taxes are calculated as a percentage of the base price.
C)​Excise taxes can limit sales and reduce product demand.
D)​Sales taxes are included in the base price of products.
E)​Sales taxes and excise taxes are terms for the same levy.

Quizplus · Accepted Answer

Excise taxes are often used to discourage the consumption of certain products, such as tobacco or alcohol, by increasing their cost. This can lead to reduced demand for these products. Sales taxes, on the other hand, are typically a fixed percentage of the total purchase price and are applied to almost all goods and services. Therefore, option C is correct. Options A, B, D, and E are incorrect explanations or incorrect statements about sales and excise taxes.

Marco Decided to Write Down All His Expenses for One