Alex Gerasimov, 2019 Microeconomics: ECON 1010: Unit 6 (Chapter 7): Taxes:●Excise Taxes (Sales Taxes, depends on the value of goods sold): -Both sides of the market usually share the burden of a tax (buyers and sellers). -Excise tax reduces the number of goods sold and increases government revenue. -Setting a tax rate so high that it deters a significant number of transactions is likely to lead to a fall in tax revenue -Taxes prevents mutually beneficial transactions from occurring -An excise tax is the easiest tax to analyze. However, in Canada today, excise taxes are actually a relatively minor source of government revenue. -If the tax is imposed on suppliers, the equilibrium price increases if on consumers, the equilibrium price decreases. Equilibrium quantity stays unaffected by whoever is asked to pay the tax. -The incidence of a tax is a measure of who incurs the burden of a tax (wich consumer or producer surplus decreases the most) and it depends on price elasticity used in supply and demand.