Final answer:
The government levies a tax on products that have spillover costs in order to discourage production and consumption, align private costs with social costs, and achieve a socially desirable level of output.
Step-by-step explanation:
When a product imposes spillover costs on society such as pollution, the government's goal in levying a tax is to discourage the production and consumption of that product, thereby moving the market level of output closer to the socially desirable level of output. This form of taxation intends to internalize the externality, ensuring that producers and consumers of the product bear the full social cost of their actions. Ideally, this would lead to a reduction in the negative externalities and align the private cost with the social cost, which could result in the socially optimal quantity being produced and consumed.