Abstract
Excise taxes are selective taxes on the sale or use of specific goods and services, such as alcohol and petrol. Over time, governments have relied less on excise taxes, though, as of 2007, excise taxes still contribute 12 per cent of total government revenues in OECD countries. In addition to generating needed revenue, excise taxes can control externalities and impose tax burdens on those who benefit from government spending. Rather more controversially, they also can be used to discourage consumption of potentially harmful substances (such as tobacco and alcohol) that individuals might over-consume in the absence of taxation.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Atkinson, A.B.., and J.E. Stiglitz. 1976. The design of tax structure: Direct versus indirect taxation. Journal of Public Economics 6: 55–75.
Besley, T.J., and H.S. Rosen. 1999. Sales taxes and prices: An empirical analysis. National Tax Journal 52: 157–178.
Cnossen, S. 1977. Excise systems. Baltimore: Johns Hopkins University Press.
Cnossen, S., and M. Smart. 2005. Taxation of tobacco. In Theory and practice of excise taxation, ed. S. Cnossen. Oxford: Oxford University Press.
Corlett, W.J., and D.C. Hague. 1953–4. Complementarity and the excess burden of taxation. Review of Economic Studies 21: 21–30.
Delipalla, S., and M. Keen. 1992. The comparison between ad valorem and specific taxation under imperfect competition. Journal of Public Economics 49: 351–368.
Diamond, P.A. 1975. A many-person Ramsey rule. Journal of Public Economics 4: 335–342.
Hines, J.R. Jr. 2007. Taxing consumption and other sins. Journal of Economic Perspectives 21(1): 49–68.
Hotelling, H. 1932. Edgeworth’s taxation paradox and the nature of supply and demand functions. Journal of Political Economy 40: 577–616.
O’Donoghue, T., and M. Rabin. 2006. Optimal sin taxes. Journal of Public Economics 90: 1825–1849.
Pigou, A.C. 1920. The economics of welfare. London: Macmillan.
Poterba, J.M. 1991. Is the gasoline tax regressive? In Tax policy and the economy, ed. D.F. Bradford, vol. 5. Cambridge, MA: MIT Press.
Poterba, J.M. 1996. Retail price reactions to changes in state and local sales taxes. National Tax Journal 49: 165–176.
Ramsey, F.P. 1927. A contribution to the theory of taxation. Economic Journal 37: 47–61.
Sandmo, A. 1975. Optimal taxation in the presence of externalities. Swedish Journal of Economics 77: 86–98.
Suits, D.B., and R.A. Musgrave. 1953. Ad valorem and unit taxes compared. Quarterly Journal of Economics 67: 598–604.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Hines, J.R. (2018). Excise Taxes. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2317
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2317
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences