FEE.org | The economic effect of a tax is clear. When a tax is placed on a product, producers end up receiving less money per unit sold while consumers end up paying more money per unit purchased. When prices fall for producers, they reduce their production. When prices rise for consumers, they reduce their consumption. This means taxes amount to little more than a reduction in trade. Reducing taxation, therefore, would have the opposite effect: Lowering the price felt by consumers while simultaneously raising the price that producers receive would increase the amount of trade that happens. Read Entire Article
By David J. Hebert
