2
QuizMultiple Choice

Paying Taxes — Quiz

Question 2 • Personal Finance

Why does an excise tax on gasoline exist? Choose two correct answers.

Answer
A
to discourage travel by automobile by making gasoline more expensive
B
to fund highway repairs and other special projects
C
to make gasoline prices more competitive
D
to discourage the use of alternative modes of transportation
E
to provide funding for healthcare services and education

Explanation

An excise tax raises the price of gasoline, which can discourage people from driving and using as much fuel. Gasoline tax revenue is also commonly dedicated to highways, including road repairs and other transportation projects. It is not generally intended to make gasoline more competitive or to fund broad services such as healthcare and education.

AI-written and checked against the verified answer.

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