The Economics of Taxation I. Economic Impact of Taxes Resource Allocation - What can happen to the factors of production when prices go up as an end result of taxation? Behavior Adjustment - What is a sin tax usually applied to? Productivity and Growth - What effect might taxes have on productivity and econom growth? Incidence of a Tax - What situation must exist to make it easier for a producer to shift the incidence of a tax to the consumer? Il. Criteria for Effective Taxes Equity - What criteria is generally recognized as making taxes fairer? Simplicity - What makes taxes more tolerable to many people? Efficiency - What are two criteria for making a tax efficient? Ill. Two Principles of Taxation Benefit Principle - What is the benefit principle of taxation? Ability to Pay Principle - What two factors is the ability to pay principle based on? IV. Three Types of Taxes What three general types of taxes exist in the United States? What is a marginal tax rate