Question

Why does the government impose excise taxes?

Answer 1

There are two reasons for this.

1. To discourage the sales of certain products

For example, the government impose a really high tax for cigarettes and gasoline. Both of these products tend to create damages to the environment and the health of the people who use them. Because of this, the government impose a high taxes in order to make the price become more expensive

2, To increase government budget.

The taxes that citizens pay to the government would be allocated to the budget that the government can use to fund their programs (such as infrastructure building, grants, health benefits, military , etc).