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Exploring Excise Tax Trends

The tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. around the world is shrinking for traditional 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. es, including 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. es on tobacco, alcohol, and motor fuel. But newer excise taxes on things like carbon, cannabis, and ride-sharing are on the rise.

This trend has the potential to significantly affect the global economy.

Adam Hoffer, Director of Excise Tax Policy, joins Jesse to discuss how excise taxes have been used by policymakers in the past and how that is changing. They discuss what makes a good design for these taxes and where excise taxes may go in the future as the traditional “sin tax” base continues to shrink.



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