What is excise tax and regressive tax?
An excise tax is a charge on some goods – such as oil. Excise is an example of a regressive tax along with such taxes as payroll tax. They are considered regressive as they are usualy levied upon a business and they have the characteristic of not contributing to the growth or development of that business. For example, all states of Australia have a payroll tax. As soon as the payroll of a business reaches a certain level then the business is required to pay an amount to the state in which it operates. If that business happens to employ people in two or more locations (eg, in Vic & NSW) then the threshhold levels in each state are pro rated in accordance with the amount of payroll relevant to each state versus total payroll. The amount is then subject to the payroll tax percentage in each state. Business hates this tax as it believes it is an impediment to employing staff.
