Economics Dictionary of ArgumentsHome
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| Excise tax: An excise tax in economics is a tax levied on specific goods or services, such as alcohol, tobacco, or gasoline. It is often included in the price of the product, making it a form of indirect tax. Excise taxes aim to raise revenue and discourage consumption of harmful or non-essential items. See also Taxation, Sales tax._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Excise Tax - Dictionary of Arguments
Rothbard III 930 Excise Tax/Rothbard: Suppose that a particularly heavy tax—of whatever type - has been laid on a specific industry: say the liquor industry. What will be the effects? (…) the tax will not simply be "passed on" to the consumers.(1) Prices/Income/VsExcise tax: Instead, the price of liquor will remain the same; the net income of the firms will decline. This will mean that returns will be Iower to capital and enterprise in liquor than in other industries of the economy; … Supply: …marginal liquor firms will suffer losses and go out of business; and, in general, productive resources of all types will flow out of liquor and into other industries. The long-run effect, therefore, is to decrease the supply of liquor produced, and therefore, by the law of supply and demand, to raise the price of liquor on the market. Tax Shifting: However (…) this process - this diffusion of suffering over the economy - is hardly "shifting." For the tax is not simply "passed on"; it only permeates to the consumers through hurting the industry taxed. The final result will be a distortion of the factors of production; fewer goods are now being produced than the consumers would prefer in the liquor industry; and too many goods, relatively to liquor, are being produced in the other industry. >Tax Shifting/Rothbard, >Sales tax/Rothbard, >Taxation/Rothbard, >Income tax/Rothbard, >Cost Principle/Rothbard, >Neutral taxation/Economic theories, >Neutral taxation/Rothbard, >Service/Rothbard, >Bureaucracy/Rothbard, >Benefit principle/Rothbard, >Progressive tax/Rothbard. 1. Businessmen are particularly prone to this "passing on" argument - obviously in an attempt to convince consumers that they are really paying any tax on that industry. Yet the argument is clearly belied by the very zeal of each industry to have its taxes Iowered and to fight against a tax increase. If taxes could really be shifted so easily and businessmen were simply unpaid collection agents for the government, they would never protest a tax on their industry. (Perhaps this is the reason why almost no businessmen have protested being collection agents for withholding taxes on their workers!)_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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