What are taxes collected on specific products such as tobacco and gasoline called?Group of answer choicesad valorem taxincome taxluxury taxexcise tax

Break Down the Problem

1. Identify the types of taxes mentioned in the question.
2. Determine which tax applies specifically to products like tobacco and gasoline.

Relevant Concepts

• Ad Valorem Tax: A tax based on the value of the item (e.g., property tax).
• Income Tax: A tax on personal income.
• Luxury Tax: A tax on goods that are deemed non-essential or luxury items.
• Excise Tax: A tax levied on specific goods or commodities, often applied to products like alcohol, tobacco, and fuel.

Analysis and Detail

• Ad Valorem Tax is not specific to products like tobacco or gasoline; it is based on value.
• Income Tax applies to earnings rather than specific products.
• Luxury Tax pertains to high-priced items but does not exclusively target products like tobacco or gasoline.
• Excise Tax is specifically designed for particular goods, such as tobacco and gasoline.

Verify and Summarize

After analyzing the types of taxes, excise tax is the correct choice for taxes collected on specific products like tobacco and gasoline.

Final Answer

The taxes collected on specific products such as tobacco and gasoline are called excise tax.