Excise Tax Research Articles

People & Places: Sector Focuses On Device Excise Tax

People & Places: Sector Focuses On Device Excise Tax

Effective Prevention against Risky Underage Drinking -- The Need for Higher Excise Taxes on Alcoholic Beverages in Germany

The study aimed to explore the place of taxation in preventing underage binge drinking in Germany. We reviewed evidence on the role of excise taxes on alcohol in preventing alcohol problems and underage drinking. We analyzed historical German data on tax on alcoholic beverages and compared this with European data, finally calculating tax scenarios and their impact on underage binge drinking. Germany applies lower taxes than many other European countries and alcohol beverage prices have decreased by 30% relative to overall price levels during the last 40 years. An optimal tax rate for reducing underage drinking would be set between the European average tax rates and Scandinavian tax rate levels.

Excise and Import Taxes on Wine Versus Beer and Spirits: An International Comparison*

Nearly all countries tax the domestic consumption of alcoholic beverages. However, the rates of taxation, and the tax instruments used, vary enormously between countries. This study provides estimates, for a wide range of high‐income and developing countries, of the consumer tax equivalents (CTEs) of wine, beer and spirits taxes as of 2008. It encompasses wholesale sales taxes, excise taxes and import tariffs expressed both in dollars per litre of alcohol and as a percentage of what the wholesale price would be without those taxes (as many taxes are volumetric and so their percentage CTE rates vary with the price of the product). The wine CTE tends to be lower in countries with a large wine industry, by which standard Australia is shown to have relatively high wine CTEs at least for premium wine. However, because Australia uses a percentage tax rather than the far more commonly used volumetric tax measure, it has a relatively low rate for non‐premium wine.

Cigarette Smoking in Indonesia: Examination of a Myopic Model of Addictive Behaviour

Using aggregated panel data taken from three waves of the Indonesian Family Life Survey (1993–2000), this article tests the myopic addiction behaviour of cigarette demand. Sensitivity analysis is done by examining a rational addiction behavior of cigarette demand. The results provide support for myopic addiction. The short- and long-run price elasticities of cigarette demand are estimated at −0.28 and −0.73 respectively. Excise taxes are more likely to act as an effective tobacco control in the long-run rather than a major source of government revenue.

A Generalization of the Atkinson-Stiglitz (1976) Theorem on the Undesirability of Nonuniform Excise Taxation

The Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation when all agents have homogeneous, separable preferences is extended to allow for nonseparability with respect to endogenous variables that will be subject to distortions. The result is useful for analysing models with production and education. For such models, the conclusion of Bovenberg and Jacobs (2005), that it is desirable to distort production rather than education choices, is shown to be reversed if the hidden characteristic a?ects the cost of education rather than productivity.

Clearing the Air: A Policy Analysis of the Ethanol Excise Tax Credit

Established in 1978, the ethanol excise tax credit has been a resounding success in helping establish a vibrant corn ethanol market, with almost 11 billion gallons produced in 2009. However, the original goals of the credit—energy security and oil independence—have not been significantly aided and, by at least some measures, have actually been hindered by the subsidy. Secondary environmental goals, such as avoidance of carbon emissions from motor fuels, show limited success. Ex post cost-benefit analyses of the subsidy have shown that it has negative to zero cost-benefit ratios and that socially optimal levels are well below current tax credit rates. The credit had a high dollar cost of $4.8 billion in 2009, and has also increased corn prices. Finally, development of a host of alternatives, such as cellulosic ethanol, have been retarded by the creation of hegemonic constituencies dependent on the credit.

The Proposed Excise Tax on Employee Health Insurance

The Proposed Excise Tax on Employee Health Insurance

Building Alliances in Unlikely Places: Progressive Allies and the Tobacco Institute's Coalition Strategy on Cigarette Excise Taxes

The tobacco industry often utilizes third parties to advance its policy agenda. One such utilization occurred when the industry identified organized labor and progressive groups as potential allies whose advocacy could undermine public support for excise tax increases. To attract such collaboration, the industry framed the issue as one of tax fairness, creating a labor management committee to provide distance from tobacco companies and furthering progressive allies' interests through financial and logistical support. Internal industry documents indicate that this strategic use of ideas, institutions, and interests facilitated the recruitment of leading progressive organizations as allies. By placing excise taxes within a strategic policy nexus that promotes mutual public interest goals, public health advocates may use a similar strategy in forging their own excise tax coalitions.

What Determines Excise Tax Rates?

We estimate the determinants of state excise tax rates on beer, cigarettes, and gasoline using a panel data set from US 48 contiguous states from 1982 to 2003. State excise tax rates currently vary a great deal and we assess empirically economic and political factors that affect the level of these tax rates. We incorporate both horizontal competition and vertical competition. Our results show that the most important factor determining the level of cigarette and gasoline tax rates is the horizontal competition between neighboring states and that vertical competition exists in case of beer and cigarette taxation.

Did the Single Market Cause Competition in Excise Taxes? Evidence from EU Countries

Tax competition theory predicts that the introduction of the EU Single Market in 1993 should have caused excise tax competition and thus increased strategic interaction in the setting of excise taxes among EU countries. We test this prediction using a panel data set of 12 EU countries over the period 1987–2004. We find that for excise duties on still and sparkling wine, beer and ethyl alcohol, strategic interaction significantly increased after 1993. There is weaker evidence of increased interaction in cigarette taxes, possibly because cigarettes are widely smuggled, giving rise to tax competition even before the Single Market.

Excise Taxes with Multiproduct Transactions

I examine excise taxes levied on multiproduct retailers. Excise taxes reduce equilibrium output and decrease equilibrium product variety in the short run, but taxes can raise output per product in the long run and induce entry. Excise taxes are overshifted into prices in a wide range of cases, including under linear and concave demand conditions, and excise taxes shift less than one-for-one into prices only when demand is highly convex. Multiproduct transactions substantively alter the efficiency of ad valorem and specific forms of excise taxes and affect the comparison of relative tax performance over short-run and long-run time horizons. (JEL H25, H32, L11, L13, L81)

Blowing Smoke and Billowing Logic: Consulting on Cigarette Excise Tax Increase Messages

This article describes a consulting project with an advocacy organization to raise cigarette excise taxes in Kentucky and to improve public health in the state. We describe the theoretical underpinnings of the project, the client, and our consultation process, objectives, products, and results.

Is CESTAT a Court and a 'Part of Judiciary' within the Meaning of Article 50 of the Constitution of India?

The Customs Excise and Service Tax Appellate Tribunal (CESTAT) has been working for more than three decades in India now. Adjudicating disputes involving technical aspects and tussles between departmental authorities and unsatisfied assesses, deciding over both questions of law and fact, CESTAT has created an indispensable niche for itself in the judicial paraphernalia of the country. Nevertheless an exact position of the Tribunal under the existing judicial setup, in terms of hierarchical is yet to be strictly defined. The present article is an attempt to trace the position of this prestigious Tribunal in the existing judicial system, as operating under the Constitution.

How Similar are Youth and Adult Alcohol Behaviors? Panel Results for Excise Taxes and Outlet Density

This paper estimates linear probability models for drinking prevalence and binge drinking by youth, young adults, and adults by using state-level estimates for 1999–2003 from the National Survey on Drug Use and Health. The regression models contain explanatory variables for economic influences (alcohol taxes, outlet density, income), demographics, and regulatory variables. The main results are, first, a positive relationship exists among youth and adult alcohol behaviors. Second, state-to-state variation in real beer taxes does not negatively affect youth behaviors. Third, higher outlet densities positively affect behaviors by young adults and adults, but do not affect youth. Fourth, several regulatory variables have a negative effect on drinking prevalence and bingeing by youth and young adults, including state liquor monopolies, Sunday closing laws, and 0.08 BAC laws for drunk driving. Fifth, attendance at sports events does not increase drinking prevalence or bingeing.

Towards a model of users' acceptance of e-government: a study of Indian central excise e-filing system

This study has identified variables affecting the acceptance of e-government and formulated a conceptual model of e-government acceptance. Further the model is validated using 158 questionnaire responses collected from the business persons using the Central Excise Tax Payment System (e-filing) of India. A priority of the variables is set by calculating the 'path coefficient' and 'total effect' of each variable on 'intention to use e-government'. Further very specific clear recommendations are generated for the Central Excise to increase the acceptance of e-government. The model developed here can be applied in other similar e-government projects to test the users' intention to use the e-government.

A Note on Deaton's Theorem on the Undesirability of Nonuniform Excise Taxation

The paper provides an extension and a new proof of Deaton's theorem on the undesirability of nonuniform excise taxation when income taxes are affine and preferences over consumption goods are separable from labour-leisure choices, homothetic, and identical across agents.

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AbstractIRS Issues Draft of “Good Governance” Principles for Charitable OrganizationsPresident's FY 2008 Proposed Budget Includes Tax Law ProposalsIRS Seeks Comments in Connection with Treasury StudyTax Section Submits Comments on Tax Shelter Excise Tax RulesIRS Issues Guidance on Certain Tax Shelter Excise Tax RulesCRS Issues ReportsOther Developments

The Effect of Sunday Sales Bans and Excise Taxes on Drinking and Cross—Border Shopping for Alcoholic Beverages

State excise taxes and Sunday sales bans are important interventions in the markets for beer and spirits. This paper estimates the effect of these policies on within–state and cross–state purchases of beer and spirits for 50 states plus the District of Columbia over the period 1990–2004. The results indicate that while demand for both spirits and beer appears to be quite price elastic, 20 to 40 percent of the elasticity for spirits is due to displacement of sales across state borders rather than decreases in own–state drinking. The paper also finds that although repeal of a Sunday sales ban leads to an increase in the sale of spirits, much of the increase in sales of beer is due to a continuation of pre–existing trends in those states that repealed their bans. Approximately 80 percent of the increase in sales of spirits that results from repealing a Sunday ban on spirits is due to an increase in own–state drinking, while the remaining 20 percent is due to changes in cross–border shopping.

Taxing Consumption and Other Sins

Federal and state governments in the United States use income and payroll taxes as their primary tools to collect revenue. Relative to the United States, governments in the rest of the world rely much more heavily on taxing consumption. Heavy American reliance on income rather than consumption taxation has not served the U.S. economy well. The inefficiency associated with taxing the return to capital means that the tax system reduces investment in the United States and distorts intertemporal consumption by Americans. While the economic logic of consumption taxation is compelling even for a closed economy, it is even more powerful for an open economy exposed to the world capital market. Consumption taxes in the form of excises can be designed to help protect the environment and control other externalities. Excise taxes can also serve the function of more closely aligning tax burdens with the benefits that taxpayers receive from certain government services. Understandable concerns arise about the distributional consequences of consumption taxation, but a system that relies heavily on consumption taxes, particularly if accompanied by an income tax, can be as progressive as any income tax the United States would realistically want to adopt.

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AbstractTax Reconciliation Legislation, Signed into Law, Contains Tax Shelter Excise Tax ProvisionStatus of Trailer BillIRS Issues Revenue Ruling as to Narrow Tax‐Exempt Status for Down‐Payment‐Assistance OrganizationsIRS Announces New Steps, Guidance Concerning Credit Counseling AgenciesCredit Counseling and Down‐Payment‐Assistance Organizations: Some Thoughts on FairnessSenator Grassley and Exempt Hospital Reforms—Part TwoOther Developments