Which of the following products are commonly targeted by government legislatures for increased excise taxes?

• A. Prescription medications
• B. Cigarettes and alcoholic beverages
• C. Children's toys
• D. Fresh fruits and vegetables

Answer: (B)

Verified step by step guidance

1. Understand the purpose of excise taxes: Governments typically impose excise taxes on goods that have negative externalities or social costs, such as health risks or environmental damage.
2. Identify products commonly associated with negative externalities: Cigarettes and alcoholic beverages are well-known for their health risks and social costs, making them common targets for excise taxes.
3. Recognize that prescription medications, children's toys, and fresh fruits and vegetables generally do not have negative externalities that justify excise taxes; in fact, some of these may be subsidized or tax-exempt to promote public welfare.
4. Recall that excise taxes are often used both to raise government revenue and to discourage consumption of harmful products, which aligns with targeting cigarettes and alcoholic beverages.
5. Conclude that among the options given, cigarettes and alcoholic beverages are the products most commonly targeted by government legislatures for increased excise taxes.