excise tax

Examples of excise tax in the following topics:

• Taxes

  • Examples of an indirect tax include sales tax and VAT (value added tax).
  • Regressive Tax:In a regressive tax system, poorer families pay a higher tax rate.
  • An excise tax typically applies to a narrower range of products, such as gasoline, tobacco, and alcohol.
  • An excise tax is typically heavier than an ad valorem, accounting for a higher fraction of a product's retail price.
  • Categorize types of taxes into ad valorem taxes and excise taxes

• The Whiskey Rebellion

  • The whiskey excise was immediately controversial, with many people on the frontier arguing the tax unfairly targeted Westerners.
  • For poorer people who were paid in whiskey, the excise was an unfair income tax that wealthier Easterners did not pay.
  • Small farmers also protested that Hamilton's excise effectively gave unfair tax breaks to large distillers, most of whom were based in the east.
  • Resistance to the whiskey excise tax came to a climax in 1794.
  • In May of that year, federal district attorney William Rawle issued subpoenas for more than 60 distillers in Pennsylvania who had not paid the excise tax.

• Corporate and Payroll Taxes

  • Many countries impose a corporate tax, also called corporation tax or company tax, on the income or capital of some types of legal entities.
  • The taxes may also be referred to as income tax or capital tax.
  • The effective tax rate is the average corporate tax rate on the company's income and this takes into consideration tax benefits included in a current tax year.
  • Corporations are also subject to a variety of other taxes including: property tax, payroll tax, excise tax, customs tax and value-added tax along with other common taxes, generally in the same manner as other taxpayers.
  • Deductions from an employee's wages are taxes that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax (PAYE), or pay-as-you-go tax (PAYG).

• Individual Taxes

  • In U.S. constitutional law, direct taxes refer to poll taxes and property taxes, which are based on simple existence or ownership.
  • These include income tax witholding, social security and medicare taxes, and unemployment taxes.
  • Sales tax is calculated as the purchase price times the appropriate tax rate.
  • In addition to sales tax, excise taxes are imposed at the federal and state levels on a goods, including alcohol, tobacco, tires, gasoline, diesel fuel, coal, firearms, telephone service, air transportation, unregistered bonds, etc.
  • The estate tax is an excise tax levied on the right to pass property at death.

• What Taxes Do

  • Taxes are the primary source of revenue for most governments.
  • Taxes are most readily understood from the perspective of income taxes or sales tax, although there are many other types of taxes levied on both individuals and firms.
  • Congress enacts these tax laws, and the IRS enforces them.
  • Governments use different kinds of taxes and vary the tax rates.
  • This is in contrast to an excise tax, where the charged value is based on the number of items being sold.

• Corporate Taxes

  • They are one in the same for tax purposes.
  • In the United States, taxable income for a corporation is defined as all gross income (sales plus other income minus cost of goods sold and tax exempt income) less allowable tax deductions and tax credits.
  • This income is taxed at a specified corporate tax rate.
  • Some systems have graduated tax rates - corporations with lower levels of income pay a lower rate of tax - or impose tax at different rates for different types of corporations.
  • Corporations are also subject to property tax, payroll tax, withholding tax, excise tax, customs duties and value added tax.

• Fiscal Policy -- Budget and Taxes

  • (Local governments, in contrast, generally collect most of their tax revenues from property taxes.
  • State governments traditionally have depended on sales and excise taxes, but state income taxes have grown more important since World War II. )
  • The 1862 tax law also established the Office of the Commissioner of Internal Revenue to collect taxes and enforce tax laws either by seizing the property and income of non-payers or through prosecution.
  • The Tax Reform Act of 1986, perhaps the most substantial reform of the U.S. tax system since the beginning of the income tax, reduced income tax rates while cutting back many popular income tax deductions (the home mortgage deduction and IRA deductions were preserved, however).
  • The Tax Reform Act replaced the previous law's 15 tax brackets, which had a top tax rate of 50 percent, with a system that had only two tax brackets -- 15 percent and 28 percent.

• Hamilton's Economic Policy

  • Mint, encouraged the development of American manufacturing, and drafted an elaborate system of duties, tariffs, and excises.
  • One of the principal sources of revenue that Hamilton recommended Congress should approve was an excise tax on whiskey.
  • Strong opposition to the whiskey tax by cottage producers in the remote, rural regions of western Pennsylvania erupted into the Whiskey Rebellion in 1794.
  • After many public protests, rioting broke out in 1794 against the central government's efforts to collect the tax.
  • President Washington pardoned the two rebels who were convicted of treason, and the tax was repealed in 1802.

• Defending the Nation

  • Among these are the power to lay and collect taxes and provide for the common defense and general welfare of the United States; to borrow money on the credit of the United States; and to regulate interstate, foreign, and Indian commerce.
  • As stated in the Constitution, "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States. "

• Promoting Economic Development

  • The reports addressed public credit, banking, and raising revenue and encouraged the development of an elaborate system of duties, tariffs, and excises.
  • He believed this "luxury tax" would not cause much consternation in the American public.
  • For these farmers, the whiskey tax constituted an unfair income tax that favored wealthy farmers and eastern distilleries who could afford to pay a flat tax per barrel.
  • In 1794, outbursts of violence against tax assesors in western Pennsylvania evolved into a large mob of poor farmers who, motivated by other economic grievances as well as the whiskey tax, demanded independence from the United States.
  • Washington later pardoned the two rebels who were convicted of treason, and the tax was repealed in 1802.