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How to Calculate Deadweight Loss to Taxation

By Motley Fool Staff – Updated Apr 23, 2025 at 1:05 PM

Key Points

  • Deadweight loss occurs when taxes disrupt the balance of supply and demand.
  • To find deadweight loss, assess the change in consumer and producer surplus post-tax.
  • Minimize taxation impact by identifying taxes that cause smaller distortions in market activities.
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