Question

Excise taxes are taxes that are: 1. applied to all goods and activities. 2. usually applied to inferior goods. 3. usually applied to income and capital gains. 4. never applied to goods or activities. 5. applied to a particular good or activity.

Answer 1

The answer is 5. applied to a particular good or activity.

Explanation: What is an excise tax?

An excise tax is usually placed on a specific good or commodity. The goods or services usually include tobacco products, alcohol or gambling. This is usually because these commodities are not entirely necessary and the government hopes to discourage usage of the commodities by increasing price.

This excise tax is usually paid for by businesses, which then causes an increase in price for the customers.

Excise taxes are usually imposed within a nation's government and not across country borders.