In 1773, American colonists protested a British tax on tea by dumping a cargo of tea into Boston Harbor. This event, which became known as the Boston Tea Party, was a significant act of opposition to colonial taxation policies. [7, 10, 11, 14]

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Excise taxes are taxes applied to specific goods and services, such as cigarettes, alcohol, and gasoline. These taxes can be implemented with the primary goal of raising government revenue or with the aim of influencing consumer behavior by discouraging the purchase of the taxed items. For instance, while tobacco taxes were historically used to raise revenue, they are now commonly used to discourage smoking. Similarly, carbon taxes are used to deter activities that lead to greenhouse gas emissions.

Excise Taxes

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

Sin taxes are a specific type of excise tax, used to offset the externalities caused by the consumption/use of the good or service being taxed. For example, taxes on gasoline attempt to discourage the excessive use of it to try and mitigate the pollution that using gasoline causes.

Sin Taxes Definition

In the 18th century, tobacco became one of the first consumer products to be subject to taxation in North America. As a specific instance, the U.S. federal excise tax on cigarettes was increased by one cent per pack in 1951, from 7 to 8 cents, to help fund the Korean War.

History of Tobacco Taxation in North America

A carbon tax is a fee imposed on the burning of carbon-based fuels. It is a tool used to address climate change, with the explicit purpose of reducing greenhouse gas emissions by making them more expensive. This tax serves as a clear example of a government policy where the primary objective is to change behavior rather than to simply raise revenue.

Carbon Tax

The Boston Tea Party

For many centuries, salt was a crucial preservative that enabled the storage, transportation, and trade of food. Recognizing its nature as a necessity, governments in ancient China, ancient India, Tsarist Russia, and France implemented taxes on salt as a dependable source of revenue. However, these taxes often led to significant social unrest. The salt tax imposed by the French monarchy, for instance, was widely resented and is considered a contributing factor to the French Revolution. [17, 21] Similarly, the high price of salt under British rule in India sparked major protests, most notably Mahatma Gandhi's Salt March in 1930, a pivotal moment in India's independence movement. [2, 3, 4]

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