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• They are distortionary . An excise tax interferes with the rational allocation of goods 

 and services by disrupting the price signals that link, supply and demand. The cost of 

 excise taxes is not just borne by producers and consumers of taxable items; in fact, 

 the entire economy suffers from efficiency losses and lower productivity due to the 

 tax. 



• Excise taxes are arbitrary . Indeed, it is hard to find a more flagrant example of 

 arbitrary taxation driven by the vagaries of special interest politics than the question 

 at hand. How do we determine which of our favorite products from L.L. Bean is 

 taxed at .25 percent, one percent, or five percent? All of it is politics, all of it is 

 subject to annual change, much of it is subject to arbitrary interpretation by tax 

 collection agencies, and none of it makes much sense. Thus excise taxes not only 

 impose efficiency costs on the economy; they also corrupt the political process and 

 subtly undermine public confidence in government. 



• Excise taxes are not cost-efficient ways to raise revenue . Some studies estimate the 

 total cost of collecting non-trust fund excise taxes - that is, the smaller excise taxes - 

 is about the same as the revenue they bring in. And so the question becomes, why 

 bother? 



• The excise tax will be invisible to the taxpayer. The "Teaming with Wildlife" 

 background sheets suggest that products subject to the tax will display some kind of 



