Fixed Tax & Tax Incidence: Why Governments Tax Cigarettes, Alcohol & Gasoline (EN dub)

Why do governments tax cigarettes, alcohol, and gasoline so heavily — but not movie tickets or restaurant meals? The answer is a beautiful application of supply-and-demand plus elasticity. In this lesson we walk through:

• How a specific (fixed) excise tax shifts the supply curve
• Who actually pays the tax — buyer or seller?
• Why inelastic demand is a tax authority's dream
• The Ramsey Rule (1927) — still applied today
• Why luxury taxes often fail
• Deadweight loss and why it stays small for inelastic goods

📌 Chapters
0:00 Why these specific products?
0:50 The fixed tax — nominal, per unit
1:40 Supply curve shifts up by the tax
2:30 Higher consumer price, lower quantity
3:10 Revenue puzzle — won't sales fall too much?
3:50 Enter elasticity of demand
4:40 Inelastic goods = ideal tax targets
5:30 The Ramsey Rule (1927)
6:00 Tax incidence — who really pays?
6:50 The cigarette tax IS a tax on smokers
7:30 Why luxury yacht taxes fail
8:10 Deadweight loss & welfare
8:40 Recap

#economics #educoglobal #microeconomics #tax #elasticity #ramseyrule #incidence #dub

Видео Fixed Tax & Tax Incidence: Why Governments Tax Cigarettes, Alcohol & Gasoline (EN dub) канала Educo Global – Multi-Language Economy