ouchers A tax is when a government takes money as part of a transaction. With gas taxes, for example, the seller of gasoline must pay 18.4 cents per gallon to the federal government. The tax then means the price buyers pay will be greater than the price sellers receive. A subsidy is the opposite of a tax; this is when a government puts in money as part of a transaction. Subsidies are common, although people are perhaps less aware of subsidies than they are taxes. Subsidies have the opposite effect of taxes; a subsidy means the price buyers pay will be less than the price s