Both a payroll tax and an excise tax on alcohol raise revenue and, respectively, shrink the markets for labor and alcohol. although both have some functions in common, governments may have different goals when levying them.
The most likely motivation for a payroll tax is to:
• discourage people from working overtime.
• raise revenue for public expenditures.
• promote other income generating activities such as financial investments.
• promote equality among people by reducing the wage gap.
The most likely motivation for an alcohol tax is to:
• raise revenue for public expenditures.
• reduce the consumption of alcohol to reduce the social costs of its consumption.
• discourage people from drinking imported alcohol instead of domestically produced alcohol.
• promote the use of other forms of controlled substances less favored by consumers.