how does tax deadweight loss relate to economic efficiency 
tax deadweight loss is a measure of the efficiency loss in a market due to taxes when taxes are introduced they somewhat mess up the natural order of markets this is because they change the way consumers interact with goods and make decisions all else being equal the most inefficient taxes will have the largest deadweight losses as they will prove to drive the most consumers away from favorable economic activity the bottom linedeadweight loss of taxation refers to the economic inefficiency resulting from taxes that distort market transactions leading to a reduction in overall economic welfare the magnitude of deadweight loss is influenced by a number of things like the elasticity of supply and demand tax rates and market conditions 