Which of the following is an example of an excise tax imposed by the government?

• A. A tax on imported goods
• B. A tax on gasoline
• C. A tax on property value
• D. A tax on personal income

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definition of an excise tax. An excise tax is a tax imposed on the sale or production of a specific good or service, often a per-unit tax rather than a tax on overall income or property value.
2. Step 2: Review each option and classify the type of tax it represents. For example, a tax on imported goods is typically a tariff, a tax on property value is a property tax, and a tax on personal income is an income tax.
3. Step 3: Identify which option fits the excise tax definition. Since excise taxes are usually applied to specific goods like gasoline, tobacco, or alcohol, a tax on gasoline is a classic example of an excise tax.
4. Step 4: Confirm that the tax on gasoline is a per-unit or percentage tax applied directly to the product, distinguishing it from broader taxes like income or property taxes.
5. Step 5: Conclude that among the given options, the tax on gasoline is the correct example of an excise tax imposed by the government.