What type of tax is applied to the production and sale of specific goods like gasoline?

Excise tax is specifically applied to the production and sale of certain goods and services, including commodities like gasoline, tobacco, and alcohol. This type of tax is typically included in the price of the product, making it different from sales tax, which is charged at the point of sale and applied to a wider range of goods and services.

Excise taxes serve multiple purposes, such as discouraging consumption of harmful products and generating revenue for the government. For example, the revenue from gasoline excise taxes often goes towards transportation infrastructure, which is critical for maintaining and improving roadways.

Income taxes are assessed on individuals or entities based on their earnings, while capital gains tax applies to the profit earned from the sale of an asset. Sales tax is a general tax levied on most transactions involving the sale of goods and services, but it does not specifically target certain goods like gasoline in the same manner as excise tax does. This distinction highlights why excise tax is the correct answer for the type of tax applied to the production and sale of specific goods.