Three Taxes That Influence Behavior

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Three Taxes That Influence Behavior

• Impact of Taxes

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Think about how these taxes affect your life.

• 1) A sin tax taxes products or services
  considered unhealthy. It is used to discourage
  the use of products that pose a health risk, such
  as tobacco and alcohol.
• http//tobaccofreekids.org/research/factsheets/pdf
  /0098.pdf

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Think about how these taxes affect your life.

• 2) The gasoline excise tax is not meant to
  discourage use of gasoline. It is a user tax.
  Gas tax revenues are used to maintain and build
  roads and highways, and regulate underground
  pollution caused by gas storage. Urban area mass
  transportation have been developed and maintained
  since 1982 with these funds.

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Think about how these taxes affect your life.

• 3) Luxury taxes tax expensive, nonessential
  items, such as luxury cars. Tax revenue is
  redistributed through government programs that
  benefit all. The luxury tax is a progressive
  tax. Goods or services taxed as luxury goods
  give them an appeal that can make to own them
  even more. There is a certain prestige in owning
  an item that is considered a luxury. By creating
  a demand, luxury taxes can generate more revenue.
  But when a luxury tax becomes too steep, people
  may choose to stop purchasing a particular
  product.
• Put to an END in 2003.

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Key Terms

• direct tax- A tax that cannot be shifted to
  others such as the federal income tax.
• excise tax- A tax on the sale or use of specific
  products or transactions.
• gasoline excise tax- An excise tax paid by
  consumers when they purchase gasoline the tax
  covers the manufacture, sales, and the use of
  gasoline

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Key Terms Cont.

• luxury tax- A tax paid on expensive goods and
  services considered by the government to be
  non-essential, such as luxury cars. No longer in
  effect.
• sin tax- A tax on goods such as tobacco and
  alcohol that pose a danger to peoples health.
• user tax- A tax that is paid directly by the
  consumer, or user, of a good, product, or service.