Excise Taxes – Still A Meaningful Piece of the Puzzle

In a recent website article, the Peter G Peterson Foundation, a US nonprofit organisation for building a sustainable fiscal path, took a look at excise taxes in the US and how they fit into the federal budget.

The foundation stated that while 100 years ago excise taxes made up between 30-50% of all federal revenue, these have decreased over time, both as a proportion of total federal revenue and as a percentage of GDP. Today, excise taxes occupy a small portion of the federal budget, with 2023 receipts totalling just $76 billion, or 2% of revenue. According to the Congressional Budget Office, excise receipts are projected to remain at 0.3% of GDP for most of the next decade.

The largest excise taxes relate to surface transportation, air travel, tobacco, and alcohol. They are also imposed on some prescription drugs, corporate stock repurchases, hazardous substances, aquatic resources, indoor tanning services, and coal.