Commodity Taxes

In this video we cover taxes and tax revenue and subsidies on goods. We discuss commodity taxes, including who pays the tax and lost gains from trade, also called deadweight loss. We’ll take a look at the tax wedge and apply what we learn to the example of Social Security taxes.

00:00 Intro
00:35 Three important ideas about commodity taxation
02:00 Who pays the tax? Tax "on" sellers
03:54 Tax "on" buyers
06:50 The tax "wedge"
08:38 Tax wedge example – Social Security Taxes

[uluvmycrazymind]

You guys are so good at explaining things clearly and simply. Bless your hearts!!! I'm so grateful for these videos!

Thank you for these clear, concise videos. I have learned a lot in my lunch breaks watching them.

I think there is a difference on who pays for social security (or other, similar stuff) when the salary is a minimum wage or close to it. Let us say that in country Y the minimum wage is 100 units, which means that no one can legally make less than 100 units (per whatever unit of time it applies to, usually a month or an hour). If the social security contributions were a 10%, then if the employee is responsible for paying them, he or she will get 90 units, while if the one paying is the employer, the employee will get 100 units (and he or she will cost 110 units to the employer/company).

I suppose there is a concept not yet covered (I am watching the "Principles of Economics" playlist), but at least under specific conditions there is a difference on who pays. When it comes to higher salaries, indeed, it does not make a difference, though leftists tend to take advantage of most people ignoring that to make their populism (for example, here in Colombia they vilify being a contractor making people believe that they would get the same monthly salary as employees instead of what usually happens: you get a lower base salary that becomes more or less the same as if you were a contractor if you add up the "benefits" you get).

[bbbbrian]

Thank you for all these videos. They are very helpful and easy to understand.

[yushaurabiudanjuma]

Thank you for simplifying your topic for students to comprehend

[BenoitOlson]

Excellent analysis, thanks! 👌 I have a quick question: 🤷‍♂️ I only have these words 🤔. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What is this? 🤔

[collinweyand]

Is there a macro video on income tax? I dont see one.

[Mujangga]

Doesn't any tax get passed down to the consumer anyway?

[yushaurabiudanjuma]

Sir I need a help from you sir with this question:TAX INCIDENCE IS ABOUT PRICES NOT QUANTITIES.Discuss