Excise taxes on smoking, drinking, gambling, polluting, and driving are very much in the news these days. Not only are these taxes convenient sources of government revenue, they can also be designed to reflect the external costs that consumers or producers of excisable products impose on other people. Global warming, acid rain, traffic congestion, and the economic costs of cigarette and alcohol consumption are problems that can be corrected through selective excise taxes and other regulatory instruments. Excise taxes, moreover, are increasingly looked upon as revenue substitutes for distortionary taxes on capital and labour.
These and other issues are addressed in this volume, which contains seven essays by a group of internationally recognized experts who analyse the current state of the art in excise taxation. The essays were initially presented at a conference on Excise Tax Policy and Administration held at the Dutch Ministry of Finance in The Hague, and attended by academics, government officials, and representatives of industry from numerous countries.
The essays provide a systematic, insightful, and often provocative treatment of a major fiscal instrument that policy-makers tend to ignore and that gets little attention in the professional literature. The authors show a sound knowledge, not only of relevant economic theory, but also of the myriad institutional details that are crucial for the practical application of that theory. No doubt, for many years to come, the volume can serve as a comprehensive guide to the debate on a wide range of excise tax policy and administration issues.
This volume and the conference that preceded it would not have been possible without the sponsorship of the International Tax and Investment Center in Washington DC. The hospitality of the Dutch Ministry of Finance and the Netherlands Institute for Advanced Study, where this volume was completed, were much appreciated. I especially would like to thank the authors, discussants, and referees of the essays, who have all been very generous with their time. Profound thanks are due to Judith Payne, Production Editor of Fiscal Studies, who cheerfully yet meticulously prepared the essays for publication.