In economics, the excess burden of taxation is one of the economic losses that society suffers as the result of taxes or subsidies. Economic theory posits that distortions change the amount and type of economic behavior from that which would occur in a free market without the tax.

Mar 22, 2024 · Excess burden of taxation, also known as the deadweight loss of taxation, refers to the economic loss that society incurs as a result of taxes that distort market behavior. When a tax is imposed, it can lead to changes in the quantity of goods and services bought and sold, moving away from the efficient market equilibrium.

Oct 17, 2023 · Increased tax rates on higher-income households impose very large excess burdens that, under reasonable assumptions, nearly equal the revenue collected.

The excess burden of taxation is the efficiency cost, or deadweight loss, associated with taxation. Excess burden is commonly measured by the area of the associated Harberger triangle, though accurate measurement requires the use of compensated demand and supply schedules.

Jul 15, 2023 · When tax rates become too burdensome, individuals and businesses may resort to illegal means to avoid paying taxes, leading to a loss of government revenue.

Aug 6, 2021 · The dangers of too much government spending are being ignored. Countries and empires throughout history have used vast building projects to justify high levels of taxation and spending.

High marginal tax rates can discourage work, saving, investment, and innovation, while specific tax preferences can affect the allocation of economic resources. But tax cuts can also slow long-run economic growth by increasing deficits.

From widely divergent sources comes recognition that taxes have grown excessive. The graduated income tax has been soundly denounced in theory and in practice by former Commissioner of Internal Revenue, T. Coleman Andrews. Among countless other expressions in similar vein, two bear repeating here.

Jun 8, 2024 · Excessive taxation can have significant economic effects, including reduced investment, decreased consumption, disincentives for work and entrepreneurship, and an increase in tax evasion.

Jan 1, 2018 · The excess burden of taxation is the efficiency cost, or deadweight loss, associated with taxation. Excess burden is commonly measured by the area of the associated Harberger triangle, though accurate measurement requires the use of compensated demand and supply...