Stealth Taxes

DEFINITION of 'Stealth Taxes'

A type of levy that governments use to increase their revenues without raising the ire of taxpayers. Compared to income taxes and property taxes, stealth taxes are smaller and less visible, so they are less likely to attract attention or spark protest. Examples of stealth taxes include sales taxes, value added taxes, tobacco taxes, liquor taxes, air travel taxes and gasoline taxes.

BREAKING DOWN 'Stealth Taxes'

Stealth taxes are sometimes built into the prices of products so that consumers don't see how much tax they are paying. Stealth taxes are often easier for governments to collect than other types of taxes and they are collected at the point of sale and are not dependent on the taxpayer's income. In addition to the implementation of new taxes or the raising of existing taxes, stealth taxes can come in the form of the removal of existing tax breaks.