We show this in Diagram 1. Where the marginal benefits attained at higher cost are forgone, the resources which would have been spent to obtain those marginal benefits are instead available to be expended more efficiently in other sectors of the economy.
The 'argument from liberty' would seem, for example, to be the argument against higher gasoline taxes in the
This is simple physics. And by the triangle inequality, such taxation of one necessity to subsidize the production of another has its own cost, and the net result is a reduction in the total real value of resources available to society. Society is the poorer as a result.