Question of the Day

Excise taxes are similar to sales taxes, except that they are imposed on specific goods and services, often to discourage or penalize certain activities. Which households pay the highest portion of their income in federal excise taxes?

Correct Answer

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The lowest-earning 20% of households pay 1.5% of their income in federal excise taxes, as compared to 0.8% for the middle class and 0.4% for the highest-earning 20%.

DocumentationExcise Taxes Distribution of the Tax Burden