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PER UNIT TAX: A tax that is specified as a fixed amount for each unit of a good sold. Federal excise taxes on gasoline and cigarettes fall into this per unit tax category.

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AD VALOREM TAX

A tax specified as a percentage of the price or value of a good, service, asset, or other activity. Ad valorem taxes tend to be broad based, imposed on activities such as income and retail sales. In fact, the two most important ad valorem taxes are income taxes and sales taxes. People pay a percentage of their incomes in income taxes or a percentage or the value of their purchases in sales taxes, regardless of the amount of time spent working or the quantities of goods purchases. An alternative is a per unit tax, with is a tax specified as a percentage of the physical quantity of a good.

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The portion of aggregate output U.S. citizens pay in taxes (30%) is less than the other six leading industrialized nations -- Britain, Canada, France, Germany, Italy, or Japan.
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