 Incidence of a TaxParthasarathi Shome
Chapter 9 in Taxation History, Theory, Law and Administration, 2021, pp 81-96 from Springer Abstract: Abstract A tax may be levied on a firm or individual but its final burden—what economists term ‘incidence’—may be shared by another economic entity. Thus, a tax on the supply of Laptops may be shifted partially to consumers if consumer demand is less than fully elastic if Laptop is a relative necessity, not a luxury. Incidence analysis of a product market alone is referred to as ‘partial incidence’ of a tax. The Laptop supplier may pass on some burden to the labour he hires, in other words, to inputs he uses in production. When all actors in the production process—inputs and output—are considered together, the final distribution of the burden among them is called ‘general incidence’ of a tax. This has been analysed in the context of the corporation income tax. It is a ‘partial’ tax collected from the income of capital in the corporate sector alone. Resource use decreases in the sector and they move out from it. They will be absorbed in the non-corporate sector though the relative returns—wages and rental of capital—to factors will change in the entire economy reflecting various product and factor substitution elasticities. These incidence outcomes are analysed here. Date: 2021 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-030-68214-9_9 Ordering information: This item can be ordered from DOI: 10.1007/978-3-030-68214-9_9 Access Statistics for this chapter More chapters in Springer Texts in Business and Economics from Springer |
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