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Excise Taxes: The Impact on Economics and Crime

June 1, 2016
By John E. Berthoud Ph.D.

Given the current focus in Washington on shifting our federal tax system towards consumption and away from productice activity, many in the states see this as a blessing to raise their consumption taxes.

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Given the current focus in Washington on shifting our federal tax system towards consumption and away from productice activity, many in the states see this as a blessing to raise their consumption taxes. While the adverse consequences of taxes on income and investment are no doubt paramount, what has been lost in the debate in the states sometimes are the negative economic consequences of taxes on consumption. Economists have long found that excise taxes offer an excellent "case study" of consumption taxes. The findings most economic studies are that higher excise taxes cause substantial and widespread economic harm.

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Taxes Government Spending