The excess burden of a tax

Question

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The excess burden of a tax refers to the deadweight loss created by a tax, which results in a loss of economic efficiency by distorting market behavior. It is the difference between the amount of economic activity that would occur in the absence of the tax and the amount that does occur after the tax is imposed. The incidence of a tax refers to who ultimately bears the burden of the tax, which can be different from its initial target. The terms "progressive" and "regressive" refer to the distributional impact of a tax on different segments of the population and are not applicable to the concept of excess burden.

The Excess Burden of a Tax