Excise Tax.

In plain English

An excise tax is a tax on a particular product or activity, rather than on income or general sales. It is often a flat amount per unit, like cents per gallon of gasoline, and it is usually baked into the shelf price so you never see it as a separate line. Governments use excise taxes both to raise money and to discourage certain behavior, which is why they land on fuel, tobacco, alcohol, and similar goods. On gasoline, federal and state excise taxes are a fixed slice of every gallon, which is part of why pump prices do not fall as fast as crude.

01Why it matters

Excise taxes are a hidden, fixed part of the price of fuel and other goods, so they shape costs you pay without ever appearing on a receipt.

02The math, step by step

The federal excise tax on gasoline is a fixed amount per gallon that stays the same whether crude is cheap or expensive, so it makes up a larger share of the pump price when oil is low.

03What this is NOT