24
QuizMultiple Choice

Fiscal Policy: Taxes — Quiz

Question 24 • Economics

How is an excise tax different from a sales tax?

Answer
A
An excise tax applies only to imported goods.
B
An excise tax is an indirect tax.
C
An excise tax applies to specific products.
D
An excise tax is not deductible.

Explanation

An excise tax is charged on particular goods or activities, such as gasoline, tobacco, or alcohol. A sales tax generally applies to a broad range of purchases. Therefore, the distinguishing feature is that an excise tax applies to specific products; it is not limited to imported goods.

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