Excise taxes violate the most basic principle of taxation–low rate, broad base–since they are purposefully levied on a narrow base and generally with the highest rate possible. Why? Generally to “discourage” the activity being taxed.
Take cigarettes for example. The base is defined as one product and the tax rate, especially over the last decade or so, keeps going up, up and up i the name of “reducing smoking.” Unfortunately, violating the principles of taxation carry a heavy price. In the case of cigarettes it can lead to cigarette smuggling and cross-border shopping.
Now, apparently, they want to tax your food . . . I wonder what kind of unintended consequences will come of this?
Hat Tip to International Liberty
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