Deadweight Loss of Taxation – This term is used to describe the negative economic effects that are associated with taxes. It is the costs incurred by society, such as decreased economic efficiency and incentives to work or innovate, due to taxation beyond what is absolutely necessary for providing revenue to the government. This concept is particularly relevant in discussions regarding the taxation of goods and services, and can be thought of as an opportunity cost — the value that could have been produced had those resources not been used for taxation.