Optimal Commodity Taxation Ramsey rule Consider the idea of marginal excess burden The additional inefficiency from incrementally raising a tax by a small amount Figure 14.1 shows the initial excess burden as a triangle(abc), and the marginal excess burden as a trapezoid (fbae)7 Optimal Commodity Taxation: Ramsey Rule • Consider the idea of marginal excess burden – The additional inefficiency from incrementally raising a tax by a small amount. – Figure 14.1 shows the initial excess burden as a triangle (abc), and the marginal excess burden as a trapezoid (fbae)