tax on income and wealth
How are direct taxes paid to government?
directly and without intermediary
Can direct taxes be adjusted?
yes - adjust rate based on income
tax on the production and consumption of goods and services
Who bears the burden of indirect taxes?
shared by consumers and producers
How are indirect taxes paid to government?
through intermediaries such as producers
tax placed on a good when it is sold as a final good to a consumer
Are sales taxes changing?
yes based on retail value of good
ad valorem tax
tax placed on every transaction in the production life of good
How is an ad valorem tax different to a sales tax?
charged to every transformative stage of produciton where good is exchanged and ownership changed
Do ad valorem taxes change?
yes based on retail value
What are the other names for per-unit tax?
specific tax excise tax
tax where a fixed amount of money per good is charged
tax on imported goods, levied upon entry into a country
What are the other names for tariff?
custorms duty impost
Are tariffs changing?
no generally specific tax
Graph for ad valorem tax
Graph for per-unit tax
How do lump sum taxes affect the supply curve?
What is assumed when apply tariffs?
constant price of imported good
taxes ---- the prices of goods and services
taxes ---- the output of goods and services
the size of the market for the good or service is ----
consumer surplus is ---- as consumers pay a higher price
producer surplus is ---- as producers after-tax revenue is ----
government enjoys ---- tax revenue
relative measurement of the respective burden of a per-unit tax on the consumers and producers
What does deadweight welfare loss represent?
existence of inefficiency in the market
Where is consumer surplus found at equilibrium?
A + B + C + D
Where is producer surplus found at equilibrium?
E + F + G + H