Some believe that excise taxes hurt mainly the specific industries they target. For example, the medical device

excise tax, which was implemented in 2013, has been controversial for it can delay industry profitability and

therefore hamper start-ups and medical innovation. The tax was repealed in late 2019. However, whether the

tax burden falls mostly on the medical device industry or on the patients depends simply on the elasticity of

demand and supply.

Long-Run vs. Short-Run Impact

Elasticities are often lower in the short run than in the long run. On the demand side of the market, it can

sometimes be difficult to change Qd in the short run, but easier in the long run. Consumption of energy is a

clear example. In the short run, it is not easy for a person to make substantial changes in energy consumption.

Maybe you can carpool to work sometimes or adjust your home thermostat by a few degrees if the cost of
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