Asked by Jacob Altizer on Jun 25, 2024
Verified
Tax incidence may be defined as the
A) average tax rate of a given group of taxpayers.
B) degree to which a tax falls on a particular person or group.
C) tax burden, or taxes as a percent of GDP.
D) number and range of goods and services that are taxed.
Tax Incidence
The analysis of the effect of a particular tax on the distribution of economic welfare among entities in the economy.
Tax Rate
The rate at which taxes are applied to the income of a person or a company.
Tax Burden
The total amount of tax that individuals, businesses, or specific sectors of the economy bear.
- Analyze the structure and incidence of specific taxes.
Verified Answer
BW
Brooke WaszakJun 30, 2024
Final Answer :
B
Explanation :
Tax incidence refers to the analysis of the effect of a particular tax on the distribution of economic welfare. It essentially looks at who ultimately bears the burden of a tax, which can differ from the entity that initially pays the tax. This is why option B is correct, as it directly addresses the concept of how a tax impacts a specific person or group, which is the essence of tax incidence.
Learning Objectives
- Analyze the structure and incidence of specific taxes.