Question

After purchasing a few 12-packs of soda for a friend's birthday party, Rheaanne was dismayed to see her checkout receipt was a few dollars more than she had budgeted. Rheaanne discovered she was charged an excise tax, which can be applied to discourage the purchase of certain items. An excise tax is also referred to as a _____ tax.

a. Sin tax
b. Sales tax
c. Point-of-purchase tax
d. Retail tax

Answer 1

An excise tax, also known as a sin tax, is a tax placed on specific goods to discourage their consumption or raise revenue.

Step-by-step explanation:

An excise tax is a tax placed on a specific good, such as cigarettes, alcohol, or gasoline. It is often referred to as a sin tax. The purpose of an excise tax is to discourage consumption of certain items or to raise revenue on products that people will continue to purchase regardless of the tax. For example, excise taxes on tobacco and alcohol are imposed to discourage their use, while excise taxes on gasoline are used to fund infrastructure projects like building and maintaining highways.