Excise Tax Quotes

In December 1790, with other options foreclosed, Hamilton revived a proposal he had floated in his Report on Public Credit: an excise tax on whiskey and other domestic spirits. He knew the measure would be loathed in rural areas that thrived on moonshine, but he thought this might be more palatable to farmers than a land tax. Hamilton confessed to Washington an ulterior political motive for this liquor tax: he wanted to lay “hold of so valuable a resource of revenue before it was generally preoccupied by the state governments.” As with assumption, he wanted to starve the states of revenue and shore up the federal government. Jefferson did not exaggerate Hamilton’s canny capacity to clothe political objectives in technical garb. There were hidden agendas buried inside Hamilton’s economic program, agendas that he tended to share with high-level colleagues but not always with the public.

Customs inspectors could not stop the export of software through telephone lines; labour inspectors could not stop software engineers from talking to customers in America at night; excise inspectors could not harass the IT firms because the government did not levy tax on services. Much like Gurgaon, India’s knowledge economy literally grew at night when the government slept.

it was England that shone as Hamilton’s true lodestar in public finance. Back in the 1690s, the British had set up the Bank of England, enacted an excise tax on spirits, and funded its public debt—that is, pledged specific revenues to insure repayment of its debt. During the eighteenth century, it had vastly expanded that public debt. Far from weakening the country, it had produced manifold benefits. Public credit had enabled England to build up the Royal Navy, to prosecute wars around the world, to maintain a global commercial empire. At the same time, government bonds issued to pay for the debt galvanized the economy, since creditors could use them as collateral for loans. By imitating British practice, Hamilton did not intend to make America subservient to the former mother country, as critics claimed. His objective was to promote American prosperity and self-sufficiency and make the country ultimately less reliant on British capital. Hamilton wanted to use British methods to defeat Britain economically.

He is engaged in barter and no nonsense. He pays taxes he can’t evade and doesn’t care whether they are called “excise” or “king’s pence” or “squeeze” or straight-out bribes. It is the other kid’s bat and ball and backyard, so you play by his rules—nothing to get in a sweat about. Respect for laws is a pragmatic matter. Women know this instinctively; that’s why they are all smugglers. Men often believe—or pretend—that the “Law” is something sacred, or at least a science—an unfounded assumption very convenient to governments.

The Constituent Assembly enjoyed a prestige accorded none of its successors, but the populace observed only such decrees as suited it. What did the people want above all else? Tax reform, abolition of indirect levies, institution of controls over the grain trade. Tax collection was suspended; the salt tax, excises, and municipal tolls were suppressed; exchange of grains was either forbidden or continually thwarted. Proclamations and decrees against this had no effect. [...] In their eyes national sovereignty entailed direct democracy, an idea that would remain dear to the sans-culottes.

Insurance Adjuster Tom We have studied your case and we have decided the policy applies. That means you’re entitled to a settlement of $13,600. I see. How did you reach that figure? That’s how much we decided the car was worth. I understand, but what standard did you use to determine that amount? Do you know where I can buy a comparable car for that much? How much are you asking for? Whatever I’m entitled to under the policy. I found a secondhand car just about like it for $17,700. Adding the sales and excise tax, it would come to about $19,000. $19,000! That’s too much! I’m not asking for $19,000 or $18,000 or $20,000, but for fair compensation. Do you agree that it’s only fair I get enough to replace the car? OK, I’ll offer you $15,000. That’s the highest I can go. Company policy. How does the company figure that? Look, $15,000 is all you’ll get. Take it or leave it. $15,000 may be fair. I don’t know. I certainly understand your position if you’re bound by company policy. But unless you can state objectively why that amount is what I’m entitled to, I think I’ll do better in court. Why don’t we study the matter and talk again? Is Wednesday at eleven a good time to talk? . . .

The disposition of universal discussion—the unending, discursive process of public altercation which was so admired, and so execrated, for much of the eighteenth century—was concerned, often, with economic policy. “From the scholastic disputes of theologians to matters of trade,” d’Alembert wrote, “everything has been discussed and analyzed, or at least mentioned.”55 For Edmund Burke, “it has been the misfortune (not as these gentlemen think it, the glory) of this age, that everything is to be discussed”; the age was one of “oeconomists, and calculators.”56 Taxes and regulations, guilds and excise inspections, were a principal preoccupation, together with religion, of enlightened opinion. Adam Smith’s most serious offense, for his Edinburgh contemporary the Reverend Alexander Carlyle, consisted in “introducing that unrestrained and universal commerce, which propagates opinions as well as commodities.”57 The commerce in opinions was itself, in large part, a commerce in opinions about commerce, or about commercial policy. The “focal point of enlightenment,” Kant says in What is Enlightenment?—the subject to be disputed, in the imperative to “argue as much as you like and about whatever you like”—consists in matters of religion. But economic matters are also a subject of enlightened discussion in Kant’s description; the tax official says, “‘Don’t argue, pay!’” and the cosmopolitan citizen “publicly voices his thoughts on the impropriety or even injustice of such fiscal measures.”58

The new GST: A halfway house In spite of all the favourable features of the GST, it introduces the anomaly of having an origin-based tax on interstate trade he proposed GST would be a single levy. 1141 words From a roadblock during the UPA regime, the incessant efforts of the BJP government have finally paved way for the introduction of the goods and services tax (GST). This would, no doubt, be a major reform in the existing indirect tax system of the country. With a view to introducing the GST, Union finance minister Arun Jaitley has introduced the Constitution (122nd Amendment) Bill 2014 in Parliament. The new tax would be implemented from April 1, 2016. Both the government and the taxpayers will have enough time to understand the implications of the new tax and its administrative nuances. Unlike the 119th Amendment Bill, which lapsed with the dissolution of the previous Lok Sabha, the new Bill will hopefully see the light of the day as it takes into account the objections of the state governments regarding buoyancy of the tax and the autonomy of the states. It proposes setting up of the GST Council, which will be a joint forum of the Centre and the states. This council would function under the chairmanship of the Union finance minister with all the state finance ministers as its members. It will make recommendations to the Union and the states on the taxes, cesses and surcharges levied by the Union, the states and the local bodies, which may be subsumed in the GST; the rates including floor rates with bands of goods and services tax; any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster etc. However, all the recommendations will have to be supported by not less than three-fourth of the weighted votes—the Centre having one-third votes and the states having two-third votes. Thus, no change can be implemented without the consent of both the Centre and the states. The proposed GST would be a single levy. It would aim at creating an integrated national market for goods and services by replacing the plethora of indirect taxes levied by the Centre and the states. While central taxes to be subsumed include central excise duty (CenVAT), additional excise duties, service tax, additional customs duty (CVD) and special additional duty of customs (SAD), the state taxes that fall in this category include VAT/sales tax, entertainment tax, octroi, entry tax, purchase tax and luxury tax. Therefore, all taxes on goods and services, except alcoholic liquor for human consumption, will be brought under the purview of the GST. Irrespective of whether we currently levy GST on these items or not, it is important to bring these items under the Constitution Amendment Bill because the exclusion of these items from the GST does not provide any flexibility to levy GST on these items in the future. Any change in the future would then require another Constitutional Amendment. From a futuristic approach, it is prudent not to confine the scope of the tax under the bindings of the Constitution. The Constitution should demarcate the broad areas of taxing powers as has been the case with sales tax and Union excise duty in the past. Currently, the rationale of exclusion of these commodities from the purview of the GST is solely based on revenue considerations. No other considerations of tax policy or tax administration have gone into excluding petroleum products from the purview of the GST. However, the long-term perspective of a rational tax policy for the GST shows that, at present, these taxes constitute more than half of the retail prices of motor fuel. In a scenario where motor fuel prices are deregulated, the taxation policy would have to be flexible and linked to the global crude oil prices to ensure that prices are held stable and less pressure exerted on the economy during the increasing price trends. The trend of taxation of motor fuel all over the world suggests that these items

Central Excise 2.3 Central Excise Duty is levied by the Central Government under the Central Excise Act, 1944. The levy is on all goods manufactured and produced in India, which are specified in the schedule to the Central Excise Tariff Act subject to certain exemptions. The effective rate may vary from product to product though most goods are subject to excise duty at 10% (without education cess). As manufacturer, credit is allowed on excise duty and countervailing duty paid on inputs and capital goods and the service tax paid on input service. The credit is allowed as a setoff against the excise duty payable on the output. Cross credit utilisation between credit of service tax and excise duty has been enabled w.e.f.10.9.2004. Service tax 2.4 Service tax is levied by the Central Government under Chapter V and Chapter VA of Finance Act, 1994. Service tax is levied on specified services, referred to as taxable services, when rendered by a service provider. Service tax is presently taxed at 10% (without education cess).Ordinarily, service tax is payable by the service provider, except in specified cases. As service provider, credit is allowed on excise duty and countervailing duty paid on inputs and capital goods and the service tax paid on input service. The credit is allowed as a set-off against the service tax payable on taxable services. VAT & CST 2.5 Value Added Tax (VAT) is levied by the State Governments on transfer of property in goods from one person to another, when such transfer is for cash, deferred payment or other valuable consideration. VAT is also payable on certain transactions that are deemed to be sale such as transfer of right to use goods, hire purchase and sale by instalments, works contract and sale of food and drink as a part of rendering of any service. 2.6 Local VAT is payable when goods are sold within the State and Central Sales Tax (CST) is payable when sale occasions the movement of goods 4

There is also a clear, demonstrated relationship between the cost of alcohol and the number of drunk-driving deaths. Research has shown that raising social awareness around drunk driving—as groups like Mothers Against Drunk Driving have done—is not enough. In most Western European countries, the sales tax on alcohol ranges between sixteen and twenty-five per cent. In the United States, it is somewhere between one-half and a third of the European rate—and because the federal excise is a flat amount (not a percentage of the sales price) it falls every year with inflation.

I ran into similar, though less dramatic events after moving to Yale Law School, where I spent two years as a Senior Research Scholar. Hawaii’s two Democratic U.S. Senators once contacted the law school to complain about testimony that I gave before the Hawaii state legislature. They blamed me for somehow single-handedly scuttling the new gun registration laws that were being considered. The associate dean of the law school called me up about the complaints and grilled me about my testimony. I am certain that neither of these incidents would have occurred if I had been on the other side the gun debate. Over the years, many academics have told me that they would have studied gun control if not for fear of damage to their careers. They didn’t want to run the risk of coming out on the wrong side of the debate. From my experience, that is understandable. Eventually, I was forced out of academia. There is only an abundance of funding for those researchers who support gun control. There is a war on guns. Just like with any war there are real casualties. Police are probably the single most important factor in reducing crime, but police themselves understand that they almost always show up at the crime scene after the crime has been committed. When the police can’t be there, guns are by far the most effective way for people to protect themselves from criminals. And the most vulnerable people are the ones who benefit the most from being able to protect themselves: women and the elderly, people who are relatively weaker physically, as well as poor blacks who live in high crime urban areas—the most likely victims of violent crime. When gun control advocates can’t simply ban guns outright, they impose high fees and taxes on guns. When the Northern Mariana Islands, a U.S. territory, had their handgun ban struck down as unconstitutional by a federal judge in March 2016, they passed a $1,000 excise tax on guns—a tax they hoped would serve as a model for the rest of the U.S.8 I hope that this book provides the ammunition people need for some of the major battles ahead. We must fight to keep people safe.

The United States is absolutely ripe for a rise in gasoline taxes. The nominal gasoline excise tax rate has been fixed at 18.4 cents per gallon since 1994.29 Inflation alone has reduced the real value of that tax per gallon by around 30 percent. As with other federal tax rates, the U.S. excise tax rate on gasoline is extremely low by international comparison. We might conservatively assume that by 2015 an extra 0.5 percent of GDP could be collected by some combination of a higher gasoline excise tax and modest carbon levies on other fossil fuels (such as on coal at the utilities). Other

While the rich became richer, the taxation policy of the government, instead of correcting this trend, actively strengthened it. One of the first decisions of the first Modi government was to abolish the wealth tax that had been introduced in 1957. While the fiscal resources generated by this tax were never significant, the decision was more than a symbolic one.126 The wealth tax was replaced with an income tax increase of 2 percent for households that earned more than Rs 10 million (133,333 USD) annually.127 Few people pay income tax in India anyway: only 14.6 million people (2 percent of the population) did in 2019. As a result, the income-tax-to-GDP ratio remained below 11 percent. Not only has the Modi government not tried to introduce any reforms to change this, but it has instead increased indirect taxes (such as excise taxes), which are the most unfair as they affect everyone, irrespective of income. Taxes on alcohol and petroleum products are a case in point. As some state governments have also imposed their own taxes, this strategy means that India has one of the highest taxation rates on fuel in the world. The share of indirect taxes in the state’s fiscal resources has increased under the Modi government to reach 50 percent of the total taxes—compared to 39 percent under UPA I and 44 percent under UPA II.128 Modi’s taxation policy, a supply-side economics approach, is in keeping with the managerial rhetoric of promoting the spirit of enterprise that the prime minister, who readily presents himself as an efficiency-conscious “apolitical CEO,” relishes. One of the neoliberal measures the Modi government enacted in the name of economic rationality, right from his very first budget in 2015, was to lower the corporate tax.129 For existing companies it was reduced from 30 to 22 percent, and for manufacturing firms incorporated after October 1, 2019 that started operations before March 31, 2023, it was reduced from 25 to 15 percent—the biggest reduction in twenty-eight years. In addition to these tax reductions, the government withdrew the enhanced surcharge on long- and short-term capital gains for foreign portfolio investors as well as domestic portfolio investors.130

What we gave mostly was wine. Especially after we made this legal(!) by acquiring that Master Wine Grower’s license in 1973. Most requests were made by women (not men) who had been drafted by their respective organizations to somehow get wine for an event. We made a specialty of giving them a warm welcome from the first call. All we wanted was the organization’s 501c3 number, and from which store they wanted to pick it up. We wanted to make that woman, and her friends, our customers. But we didn’t want credit in the program, as we knew the word would get out from that oh-so-grateful woman who had probably been turned down by six markets before she called us. Everybody wanted champagne. We firmly refused to donate it, because the federal excise tax on sparkling wine is so great compared with the tax on still wine. To relieve pressure on our managers, we finally centralized giving into the office. When I left Trader Joe’s, Pat St. John had set up a special Macintosh file just to handle the three hundred organizations to which we would donate in the course of a year. I charged all this to advertising. That’s what it was, and it was advertising of the most productive sort. Giving Space on Shopping Bags One of the most productive ways into the hearts of nonprofits was to print their programs on our shopping bags. Thus, each year, we printed the upcoming season for the Los Angeles Opera Co., or an upcoming exhibition at the Huntington Library, or the season for the San Diego Symphony, etc. Just printing this advertising material won us the support of all the members of the organization, and often made the season or the event a success. Our biggest problem was rationing the space on the shopping bags. All we wanted was camera-ready copy from the opera, symphony, museum, etc. This was a very effective way to build the core customers of Trader Joe’s. We even localized the bags, customizing them for the San Diego, Los Angeles, and San Francisco market areas. Several years after I left, Trader Joe’s abandoned the practice because it was just too complicated to administer after they expanded into Arizona, Washington, etc., and they no longer had my wife, Alice, running interference with the music and arts groups. This left an opportunity for small retailers in local areas, and I strongly recommended it to them. In 1994, while running the troubled Petrini’s Markets in San Francisco, I tried the same thing, again with success, for the San Francisco Ballet and a couple of museums.

In the long term,” wrote the English economist John Maynard Keynes, “we are all dead.” The Scottish Enlightenment learned a different lesson from the changes brought by union with England. Its greatest thinkers, such as Adam Smith and David Hume, understood that change constantly involves trade-offs, and that short-term costs are often compensated by long-term benefits. “Over time,” “on balance,” “on the whole”—these are favorite sentiments, if not expressions, of the eighteenth-century enlightened Scot. More than any other, they capture the complex nature of modern society. And the proof came with the Act of Union. Here was a treaty, a legislative act inspired not by some great political vision or careful calculation of the needs of the future, or even by patriotism. Most if not all of those who signed it were thinking about urgent and immediate circumstances; they were in fact thinking largely about themselves, often in the most venal terms. Yet this act—which in the short term destroyed an independent kingdom, created huge political uncertainties both north and south, and sent Scotland’s economy into a tailspin—turned out, in the long term, to be the making of modern Scotland Nor did Scots have to wait that long. Already by the 1720s, as the smoke and tumult of the Fifteen was clearing, there were signs of momentous changes in the economy. Grain exports more than doubled, as Scottish agriculture recovered from the horrors of the Lean Years and learned to become more commercial in its outlook. Lowland farmers would be faced now not with starvation, but with falling prices due to grain surpluses. Glasgow merchants entered the Atlantic trade with English colonies in America, which had always been closed to them before. By 1725 they were taking more than 15 percent of the tobacco trade. Inside of two decades, they would be running it. A wide range of goods, not just tobacco but also molasses, sugar, cotton, and tea, flooded into Scotland. Finished goods, particularly linen textiles and cotton products, began to flood out, despite the excise tax. William Mackintosh of Borlum saw even in 1729 that Scotland’s landed gentry were living better than they ever had, “more handsomely now in dress, table, and house furniture.” Glasgow, the first hub of Scotland’s transatlantic trade, would soon be joined by Ayr, Greenock, Paisley, Aberdeen, and Edinburgh. By the 1730s the Scottish economy had turned the corner. By 1755 the value of Scottish exports had more than doubled. And it was due almost entirely to the effect of overseas trade, “the golden ball” as Andrew Fletcher had contemptuously called it, which the Union of 1707 had opened.

Bombay, a city where Gujaratis and Maharashtrians and Tamilians and Parsis become Bombaykars, allegiances shifted to contemporary urban existence rather than to the regions that created them. The Joshis considered themselves modern, but in one respect they rang a bit of the bygone days: the parents—an excise tax officer and a housewife

This decision produced a scene that provides the most graphic and dramatic illustration of the two competing versions of what the American Revolution had come to mean in the 1790s. On one side stood the rebels, a defiant collection of aggrieved farmers emboldened by their conviction that the excise tax levied by Congress was every bit as illegitimate as the taxes levied by the British ministry. On the other side stood Washington and his federalized troops, an updated version of the Continental army, marching west to enforce the authority of the constitutionally elected government that claimed to represent all the American people. It was “the spirit of ’76” against “the spirit of ’87,” one historic embodiment of “the people” against another.

The Rock: You have to remember that the IRS wants to tax you on your money so badly that, at a certain point, they will force you to take money out. This happens at age 70½, and it’s called a Required Minimum Distribution (RMD). If you forget or choose not to take the money out, the IRS imposes what’s called an excise tax. In reality it’s a penalty, and it’s an astounding 50% of your RMD. In other words, if you were supposed to take out $10,000 but didn’t, you would get a bill in the mail for $5,000. And that doesn’t even include the income tax! Throw in another 30% (24% federal and 6% state) for that, and you’re looking at forfeiting 80% of whatever you were supposed to take out but didn’t. As you can see, the IRS is pretty serious about getting their money. The Hard Place: Now we understand what happens if you don’t take enough money out of your tax-deferred investments. But what happens if you take out too much? Beyond paying increasingly higher amounts of tax, the IRS says that as much as 85% of your Social Security becomes taxable. What?! you may be thinking. Social Security felt like a tax when it came out of my paycheck, and now they’re going to tax it before I get it back? That’s like a double tax! Sadly, you read correctly.

Finns are rightly proud of the strong foundations of their society. Famously high tax rates mean the nation is well equipped to look after its citizenry with some of the world’s best health care and education. Despite the high excise on alcohol, Finns appreciate the reliable public transport and world-class universities, libraries and other infrastructure these same taxes afford. Like much of the world, the country is holding its breath as ageing baby boomers retire and it attempts to maintain high pensions.

December 14, 1790, one day after he jolted Congress with his call for an excise tax on liquor, Alexander Hamilton submitted another trailblazing report, this one a clarion call to charter America’s first central bank.

After being exculpated by the House investigating committee in late May 1794, Hamilton had informed George Washington that he would not resign after all, citing the prospect of war. In the end, he did go to war, not against European powers but against American frontier settlers. The Whiskey Rebellion in western Pennsylvania that year was an armed protest against the excise tax on domestic distilled spirits—the “whiskey tax,” in common lingo—that Hamilton had enacted as part of his funding system.

The court approved Hamilton’s argument that this excise tax was legal and that Congress had power “over every species of taxable property, except exports.”5 The decision in Hylton v. United States not only endorsed Hamilton’s broad view of federal taxing power but represented the first time the Supreme Court ever ruled on the constitutionality of an act of Congress.

In 1880, the US government raised 90 percent of its tax revenue from customs duties (56 percent) and excise taxes on tobacco and alcohol (34 percent). By 1930, income taxes accounted for nearly 60 percent of US government receipts.

Indeed, the excise tax system had very elaborate record keeping. Officers kept three different types of records, all of which were supposed to match one another, and any tampering with these records was a serious offense. This remarkable level of state supervision of society exceeds what the governments of most poor countries can achieve today, and this in 1710.