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An '''excise''' is a [[tax]] levied exclusively on [[goods]], [[services]], or activities which are considered ''[[Privilege|privileged]]'' or ''[[Luxury good|luxurious]]''. Excises may not encumber “essential” items, or anything directly connected with the exercise of an unalienable right, such as the right to practice one’s religion or earn a living.  [[Adam Smith]], whose work, ''[[The Wealth of Nations]]'', functioned as the economic bible of America’s [[Founding Fathers]], defined “luxurious” items as those which are not necessary to sustaining life, and thus which “every man is allowed to buy or not buy as he chuses.” [Bk. V, Ch. 2, Pt. 2]  Such items are legitimate objects of excise.  On the other hand, he defined “necessary” items as those “which are indispensably necessary for the support of life,” including those which “the custom of the country renders it indecent for creditable people…to be without.”  In modern America, items which are “indecent” for “creditable people to be without" include food, clothing, housing, transportation, medicine, health care, arms for self-defense, phone service, sundries, education, a job in the private sector, etc.  These items and activities are not qualified to be taxed under an excise.

An '''excise''' is a [[tax]] levied exclusively on [[goods]], [[services]], or activities which are considered ''[[privilege]]d'' or ''[[luxury good|luxurious]]''. Excises may not encumber “essential” items, or anything directly connected with the exercise of an unalienable right, such as the right to practice one’s religion or earn a living.  [[Adam Smith]], whose work, ''[[The Wealth of Nations]]'', functioned as the economic bible of America’s [[Founding Fathers]], defined “luxurious” items as those which are not necessary to sustaining life, and thus which “every man is allowed to buy or not buy as he chuses.” [Bk. V, Ch. 2, Pt. 2]  Such items are legitimate objects of excise.  On the other hand, he defined “necessary” items as those “which are indispensably necessary for the support of life,” including those which “the custom of the country renders it indecent for creditable people…to be without.”  In modern America, items which are “indecent” for “creditable people to be without" include food, clothing, housing, transportation, medicine, health care, arms for self-defense, phone service, sundries, education, a job in the private sector, etc.  These items and activities are not qualified to be taxed under an excise.

Consequently, excises in the United States currently tax only certain luxury items and licensed activities, such as [[liquor]], [[tobacco]], luxury automobiles, aviation permits, and certain government-connected activities.

Consequently, excises in the United States currently tax only certain luxury items and licensed activities, such as [[liquor]], [[tobacco]], luxury automobiles, aviation permits, and certain government-connected activities.

==Adam Smith - ''The Wealth of Nations''==

==Adam Smith - ''The Wealth of Nations''==

'''1. Excises may only tax luxuries'''

===1. Excises may only tax luxuries===

"The duties of excise are imposed briefly upon goods of home produce destined for home consumption. They are imposed only upon '''a few sorts''' of goods of the most general use. There can never be any doubt either concerning the goods which are subject to those duties, or concerning the particular duty which each species of goods is subject to. They fall almost altogether upon what I call '''luxuries''', excepting always the four duties above mentioned, upon salt, soap, leather, candles, and, perhaps, that upon green glass."  [Book V, Ch. 2, Para. V.2.164]

"The duties of excise are imposed briefly upon goods of home produce destined for home consumption. They are imposed only upon '''a few sorts''' of goods of the most general use. There can never be any doubt either concerning the goods which are subject to those duties, or concerning the particular duty which each species of goods is subject to. They fall almost altogether upon what I call '''luxuries''', excepting always the four duties above mentioned, upon salt, soap, leather, candles, and, perhaps, that upon green glass."  [Book V, Ch. 2, Para. V.2.164]

'''2. Excises tax only a few items, not all items'''

===2. Excises tax only a few items, not all items===

"In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expence, it does not seem necessary that every single article of that expence should be taxed. The revenue which is levied by the duties of excise is supposed to fall as equally upon the contributors as that which is levied by the duties of customs, and the duties of excise are imposed upon '''a few articles only''' of the most general use and consumption."  [Book V, Ch. 2, Para. V.2.176]

"In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expence, it does not seem necessary that every single article of that expence should be taxed. The revenue which is levied by the duties of excise is supposed to fall as equally upon the contributors as that which is levied by the duties of customs, and the duties of excise are imposed upon '''a few articles only''' of the most general use and consumption."  [Book V, Ch. 2, Para. V.2.176]

 

===3. The masses should not pay excises on essential items===

'''3. The masses should not pay excises on essential items'''

"It must always be remembered, however, that it is the '''luxurious''' and '''not the necessary expence''' of the inferior ranks of people that ought ever to be taxed."  [Book V, Ch. 2, Para. V.2.189]

"It must always be remembered, however, that it is the '''luxurious''' and '''not the necessary expence''' of the inferior ranks of people that ought ever to be taxed."  [Book V, Ch. 2, Para. V.2.189]

'''4. Excises are generally repugnant, and should be limited in scope'''

===4. Excises are generally repugnant, and should be limited in scope===

"Taxes upon '''luxuries''' generally are, and always may be, paid piecemeal, or in proportion as the contributors have occasion to purchase the goods upon which they are imposed…  They offend in every respect against the fourth [maxim of fair taxation.]"  [Book V, Ch. 2, Para. V.2.205]

"Taxes upon '''luxuries''' generally are, and always may be, paid piecemeal, or in proportion as the contributors have occasion to purchase the goods upon which they are imposed…  They offend in every respect against the fourth [maxim of fair taxation.]"  [Book V, Ch. 2, Para. V.2.205]

'''5. Any tax on a necessity is a direct tax, as opposed to an excise'''

===5. Any tax on a necessity is a direct tax, as opposed to an excise===

"It is thus that '''a tax upon the necessaries of life operates''' exactly in the same manner '''as a direct tax upon the wages of labour'''…  [Such taxes are] absurd and destructive."  [Bk. V, Ch. 2, V.2.150 and 135]

"It is thus that '''a tax upon the necessaries of life operates''' exactly in the same manner '''as a direct tax upon the wages of labour'''…  [Such taxes are] absurd and destructive."  [Bk. V, Ch. 2, V.2.150 and 135]

==Alexander Hamilton - ''The Federalist Papers''==

==Alexander Hamilton - ''The Federalist Papers''==

'''1. Excises can only be placed on objects proper for such a tax'''

===1. Excises can only be placed on objects proper for such a tax===

"There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by '''a judicious selection of objects proper for such impositions'''. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects."  [No. 21]

"There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by '''a judicious selection of objects proper for such impositions'''. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects."  [No. 21]

'''2. Excises must be confined to a limited number of special items'''

===2. Excises must be confined to a limited number of special items===

"In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be '''confined within a narrow compass'''. The genius of the people will ill brook [not tolerate] the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the inperceptible agency of taxes on consumption…

"In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be '''confined within a narrow compass'''. The genius of the people will ill brook [not tolerate] the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the imperceptible agency of taxes on consumption…

"In this country, if the principal part [of revenues] be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; '''nor… are the objects proper for excise sufficiently numerous''' to permit very ample collections in that way." [No. 12]

"In this country, if the principal part [of revenues] be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; '''nor… are the objects proper for excise sufficiently numerous''' to permit very ample collections in that way." [No. 12]

'''3. Excises tax particular goods, not all goods'''

===3. Excises tax particular goods, not all goods===

"They would not, therefore, in this mode alone contribute to the public treasury in a ratio to their abilities. To make them do this it is necessary that recourse be had to excises, the proper objects of which are '''particular''' [privileged, luxurious] kinds of manufactures."  [No. 35]

"They would not, therefore, in this mode alone contribute to the public treasury in a ratio to their abilities. To make them do this it is necessary that recourse be had to excises, the proper objects of which are '''particular''' [privileged, luxurious] kinds of manufactures."  [No. 35]