What You Need To Understand About Excise Taxes

There are so many different types of taxes we all have to pay and this is certainly not an area that’s easy to understand.  This is why you ought to look at the services offered by low cost tax attorneys in Orlando.  Excise taxes are levies on the specific commodities. A comprehensive pattern of excise taxes is an approximation of general sales tax. Therefore, excises and sales taxes are different in the sense that sales taxes are wider in coverage than excise taxes; their only difference is in their coverage and they virtually have no difference in kinds of commodities being taxed. International transactions are levied with an excise tax which is different from customs duties which are being levied on imported goods.

In Ancient Egypt, salt is being taxed and Egypt, apparently, is the first country to impose excise taxes. The practice of imposing excise taxes became widespread in Western Europe with the noticeable growth of trading throughout the 14th century. In the 17th century, Britain introduced this imposition of this tax locally and in the 18th century, their imposition of excise taxes on the American colonies which was one of the causes of the Revolutionary War.

There are four justifications for the imposition of excise taxes. One is that luxury commodities are taxed to impose levies on those whose income belongs in the upper bracket of the society. Another is that excise taxes are also imposed on commodities which are considered to be socially harmful such as tobacco and alcoholic drinks to discourage their marketability. Excise taxes are also imposed on the beneficiaries of government expenditures, whereas vehicles and gasoline subjected to this tax and the funds collected from this are used for the maintenance and construction of highways. Lastly, in times of inflation, excise taxes are imposed on scarce commodities to hold back their purchases.

Since taxes are generally shifted from the producers to consumers, such taxes makes taxation more regressive in relation to the income of the taxpayers; the poor pays a lot more than the rich ones.