Class 39 - Everything's Bigger in Taxes

An excise tax is where the legal liability for the tax is on the seller – they have to pay the government.

The tax may increase but the product’s price did not increase. The ultimate price increases.

Why do taxes not raise as much as they should? The make wedges between buyers and sellers.
-inefficient
-hurts the world

Taxes are bad = prevent socially beneficial transactions.

Taxes aren’t costly. The act of raising taxes is.