This feels true, but the name "third order taxes" does not clearly point to this phenomenon. I think of second order taxes as "my employer paid pay roll tax, so I get less money" or "this good was tariffed, so I payed more for it even though it was imported through a middle man and not directly paid by me."

I will say that what you spend your money on has a huge impact of how much the IRS gets at the end of the day. For an extreme example, if you give the money to a 501c then it's not taxed, and there are several ways the 501c could spend the money that wouldn't be taxed....