Why do taxes exist? What are the effects of taxes? We discuss how taxes affect consumer surplus and producer surplus and discuss the concept of deadweight loss at length. We’ll also look at a real-world example of deadweight loss: taxing luxury yachts in the 1990s.

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00:00 Introduction
00:30 The Effects of a Tax
04:16 Explaining Deadweight Loss
07:26 Deadweight Loss and Elasticity
09:30 Taxing Yachts – A Good Idea?