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Indirect taxes

In this centrespread, David Horner outlines indirect taxes and how they can be used to correct market failure

© Joshua Resnick/stock.adobe.com

■ Indirect taxes are those charged on the production of output (goods and services) that are paid indirectly by consumers.

■ The tax is collected by the business selling the output – either as a manufacturer or as a retailer – but the consumer normally ‘pays’ the tax (at least in part) through an increased selling price for the output as a result of the tax.

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Previous

Understanding economic data: Unpacking the inflation ‘basket’

Next

Giffen goods and the law of demand