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Watch: Tax Foundation Excise Tax Event

1 min readBy: Scott Drenkard

On Feb. 15, the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation hosted an event on excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. policy across the 50 states. We heard from experts with differing perspectives on excise taxes, including Reid Wilson, national correspondent from The Hill; Todd Nesbit, professor of economics at Ball State University; and Richard Auxier, research associate at Tax Policy Center.

Our discussion touched on many different industry-specific taxes including cigarette taxes, alcohol taxes, marijuana taxes, and even taxes on sugar-sweetened beverages.

Professor Nesbit kicked off the event with some stories from his new book, For Your Own Good, of how excise taxes can have unintended consequences. Plastic bag taxes, for example, actually result in greater carbon emissions as consumers switch to paper products that carry a bigger carbon footprint.

Wilson noted that “sin” taxes have grown significantly even in just the last decade from their traditional application to alcohol and cigarettes to new applications to soda, plastic bags, marijuana, or opioids.

Auxier went over principles that should be considered when an excise tax is proposed. Defining goals and then assessing the achievement of those goals is central to better policy in this area.

The event was live-streamed on Facebook Live, but if you missed the opportunity to follow along with us, the video is available here below.