Excise taxes in Washington amount to $682 per capita, ranking the state 10th highest in the country, according to the Tax Foundation. We suspect few Washingtonians, certainly few who smoke or drink alcoholic beverages, will be surprised.
Excise taxes are particular taxes levied on specific goods or activities, not general tax bases like income or consumption. Some excise taxes are fairly well-known to the public, like cigarette or alcohol taxes, but others are more hidden, like taxes on admission for amusement businesses.
We’ve previously written about the regressive nature of these taxes, which some analysts point out contributes to the state’s reputation for imposing a heavier burden on low-income residents. The Tax Foundation similarly states,
What makes the system “regressive” are the high “sin” sales taxes on liquor and cigarettes, he added. According to the Center for Disease Control, “people living below the poverty level and people having lower levels of educational attainment have higher rates of cigarette smoking than the general population.”
As the map above shows, the absence of a personal income tax does not explain Washington’s reliance on excise taxes. Several states that do not levy a personal income tax – Tennessee, Wyoming and South Dakota – rank in the bottom half of the states on excise taxes. And the state with the highest excise tax burden – Vermont – is an income tax state.