Talk:Effect of taxes and subsidies on price

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[edit] edited a large amount

I just edited a large amount on this page. I don't feel like anything that was said before was wrong, I just felt it was incomplete, so I added a more in depth and comprehensive analysis regarding price effects on per unit taxes and subsidies. 66.31.43.244 05:09, 4 January 2006 (UTC)Cybergroup Jan. 3 2006

The article is certainly incomplete. It doesn't mention the case of taxes on highly or completely inelastic goods such as the rental of undeveloped land or the rental of radio spectrum. These taxes behave rather differently from the examples given. In particular the tax falls completely on the supplier and has no effect on the supply curve and consequentially no effect on the price of the good. It also has the opposite effect on investment from that described for elastic goods. The capital cost of the good (ie land or radio spectrum to rent out to others) actually drops because of the reduced returns which are expected as a result of having to pay the tax. -- Derek Ross | Talk 06:10, 27 October 2008 (UTC)

[edit] Reference

http://www.taxfoundation.org/press/show/2208.html This article may be useful. Morphh (talk) 14:58, 16 February 2007 (UTC)

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