Asked by Brittany Whitworth on Jul 30, 2024
Verified
The incidence of a tax refers to:
A) who receives the benefits from the revenue generated by the tax.
B) the changes in the marginal tax rate as income increases.
C) whether the tax is regressive,proportional,or progressive.
D) who bears the burden of the tax.
E) whether the tax is based on the ability-to-pay principle.
Tax Incidence
The distribution of tax burden among taxpayers; who ultimately pays the tax.
Marginal Tax Rate
The percentage of each additional dollar of income that goes to the tax.
Regressive
A term used to describe a tax system in which the tax rate decreases as the taxpayer's income increases, placing a larger burden on lower-income earners.
- Understand the concept of tax incidence and its implications.
Verified Answer
ZK
Zybrea KnightAug 04, 2024
Final Answer :
D
Explanation :
The incidence of a tax refers to who bears the burden of the tax. This can be different from who officially pays the tax, which is why the incidence is an important consideration in taxation.
Learning Objectives
- Understand the concept of tax incidence and its implications.