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The term "deadweight loss of taxation" refers to the negative manner that better defines the wedge a tax places between buyers & sellers. In this particular situation the "dead weight loss" reduces the product or quantity exchanged. The tax increases the "wealth" of the government and reduces the welfare of both buyer & seller. Taken in its totality it's a dead weight loss because all three parties to the exchange are reduced because the cost of the tax exceeds the revenue raised by the government.

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