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Direct tax
Tax paid to the government directly by the taxpayer (individual).
Equity
Refers to the concept where there is a fair resource distribution.
Government intervention
When a government alters the resource allocation that markets would have achieved working freely on their own.
Indirect taxes
Taxes levied on spending on goods and services. They are called indirect because while consumers contribute to part or all of the tax, it is the suppliers (firms) who collect and transfer these taxes to the government authorities (consumers pay the taxes indirectly).
Market Failure
Occurs when firms fail to efficiently allocate the resources within an economy.