Final answer:
Excise taxes are specific taxes on goods like gasoline and cigarettes that can discourage consumption or raise revenue, while tariffs are taxes on imported goods designed to protect domestic industries by making imports more expensive.
Step-by-step explanation:
Excise taxes and tariffs:
Excise taxes and tariffs are two different forms of taxation that serve unique purposes within an economy. Excise taxes are levied on specific goods, such as gasoline, cigarettes, and alcohol, and can serve to discourage consumption or to raise revenue on products with relatively inelastic demand. For example, an excise tax is added to gas purchases, and can be applied to activities like gambling.Tanffs and excise taxes can be sorted into different categories based on their characteristics and purposes.
Tariffs, on the other hand, are taxes applied to foreign goods and are levied on imports. This form of taxation is used by governments to protect domestic industries by making imported goods more expensive, thus encouraging consumers to buy locally produced items. A recent example is the 5% tariff on large, flat-screen televisions imported to the U.S. from China, which serves this purpose.