Question

State governments levy excise taxes on cigarettes because:

a)they want to subsidize tobacco farming.

b) they want to discourage cigarette smuggling.

c)it is an easy way to raise tax revenue while discouraging smoking.

d)they want to minimize the tax burden on consumers

Answer 1

Answer: It is a easy way to raise tax revenue while discouraging smoking.

Step-by-step explanation:

An excise duty is a tax on manufactured product. It is usually imposed on products which government wants to stop people from consuming such as cigarette or alcohol.

The main rationale behind the imposing of tax is to generate revenue. The revenue gotten can then be used by the government to cover its expenses or improve the infrastructure in the country.

Apart from revenue generation, excise duty is used to prevent people from taking harmful products. So the right answer is option C.