Suppose an individual is selling a car and has a “bottom line” of $19,000. Also suppose that another individual is looking to purchase a car, with a "top dollar" of $24,000.
A wealth-creating transaction is possible, since the seller's bottom line is the buyer's top dollar. The total surplus from such a purchase would be
Suppose the government imposes a tax of $6,000 on the purchase of a car.
With this tax, the wealth-creating sale of the car between these two buyers will take place.