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> Increased tax loads always get passed on to the consumer Yep, taxes are a little bit worse than that too because the cost also gets passed to the producer as
by flashback2199 3y ago
> Increased tax loads always get passed on to the consumer
Yep, taxes are a little bit worse than that too because the cost also gets passed to the producer as well in the form of decreased demand.
The result is fewer goods and services exchanged - ie less economic activity - than there would have been with a lower tax.
Formally, it is called deadweight loss in microecon:
https://en.wikipedia.org/wiki/Deadweight_loss?wprov=sfla1 https://en.wikipedia.org/wiki/Deadweight_loss?wprov=sfla1
- segfaltnh 3y agoIs there an example of negative repercussions of this in modern society? I hear people complain about extreme taxation relative to history, but I also have plenty of access to goods and services in my region, so it seems there must be other, perhaps higher weighted, factors?
- flashback2199 3y agoI learned about it in intro microecon in college. My understanding is that it is part of standard microecon curriculum.