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Padding goes inside the border, margin goes outside. If you have no border, you won't see it.
Depending on how the sizes are computed, margin can be included or not in width and height, I think padding is always included.
Margin "collapses" between elements, padding doesn't. If you an element with "margin-bottom: 1em" followed by another with "margit-top: 2em", the separation between them will be 2em (if both have the same font size). If you use paddings, the separation will be 3em.
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