Excess Burden defined Figure 13. 1 shows the budget constraint (AD), with utility maximized at bundle E1 Ad-valorem tax levied on barley at rate tb raises the price to(1+tb)Pb, and rotates the budget constraint along the x-axis The new budget constraint is AF4 Excess Burden Defined • Figure 13.1 shows the budget constraint (AD), with utility maximized at bundle E1 . • Ad-valorem tax levied on barley at rate tb raises the price to (1+tb )Pb , and rotates the budget constraint along the x-axis. The new budget constraint is AF