The original levy of the excise tax may be made in different ways, even though the burden is expected to rest upon the final consumer of the product. These ways may be divided into two general classes: a license fee or tax is imposed upon either the producer or seller of the commodity, or the tax is levied against each unit of the article. These methods may be used singly or in combination. In the United States the license taxes are collected by means of stamps or licenses which must be conspicuously displayed in the place of business. The purchase of the license is a transaction which is necessary before the conduct of the business becomes legal. Severe penalties are liable to be inflicted in cases of default. All persons who are subject to the tax must register with the internal revenue collector of the district in which he is located, and furnish specific information of various kinds in regard to his business. The tax is a graduated one, and the rates before the Great War ranged from $600 on the manufacturers of oleomargarine to $20 on the retailers of malt liquors. The dealers in tobacco were formerly required to pay a license, but this stipulation was repealed in 1890.

Tax upon Units of Goods. - The levy of a tax upon the units of goods produced is far more important than the levy upon producers and dealers. This, in fact, constitutes the real internal revenue system, while the license taxes are merely auxiliary measures. In the case of the levy upon the commodity the payment of the tax is usually required from the manufacturer, for it is here that the goods are concentrated, and hence the administrative work is reduced to a minimum. The most common method of collecting this form of tax is from the sale of stamps. These are canceled by the proper official, and wherever possible are affixed to the package containing the goods in such a way that the stamp will be broken upon opening the package. The failure of a package to bear a stamp is evidence that the tax has not been paid, and constitutes a basis for prosecution. Where the stamp cannot be affixed to the article, it is required to be conspicuously posted in the place of business. Some fraud has come from the re-use of stamps, but this has been reduced to a minimum.

Commodities Taxed. - The principal commodities upon which the excise tax has been levied in the United States are distilled and fermented liquors, tobacco, oleomargarine, playing cards, and patent medicines. In times of emergency, such as a war, this list has been greatly extended. Cigars and cigarettes are graded both as to weight and value, while the tax on the other commodities ranges according to quantity. In countries other than the United States, excise taxes have been placed upon such articles as sugar, silk, chocolate, and salt. Salt was formerly extensively used as a basis for taxes, and collection was made in the form of licenses upon producers and distributors, or by the granting or maintenance of a monopoly. The tax was productive, but unjust, because it fell with about the same weight upon all classes of individuals, no matter what their ability to meet the burden. The use of salt, consequently, as a basis for taxes, has been generally discarded. The principal bases for the modern excise tax the world over are liquors and tobacco, and the motive behind the levy is frequently sumptuary as well as fiscal.