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Indirect Taxation (Purpose (Discourage consumption of goods that are…

- - - - Increase in price, decrease in qty demanded
    - - Huge tax has to be charged to legitimately reduce the demanded qty
  - - - Narrow income inequality, achieve some degree of income redistribution
        
        Income Redistribution = Policies which reduce income inequalities via narrow income disparity from those with more to those with less
  - - - Use of excise tax improve allocation of resources to ACHIEVE ALLOCATIVE EFFICIENCY
- - - - Reduction of Consumer surplus
      - Welfare lost from society
      - Reduction of Producer surplus
      - Due to lower equilibrium output, fewer workers needed, increase in unemployment among workers