What is tax incidence?
Tax incidence examines who ultimately bears the economic burden after prices and wages adjust.
Definition, calculation and mechanism
The legal payer and economic bearer can differ. If buyers respond little to price while sellers can adjust supply readily, buyers may bear more. Market structure and time horizon matter.
Interpretation, examples and limits
Exemptions, avoidance and impacts on low-income groups need separate analysis. Calling a levy a business tax does not prove businesses bear it all. Estimate actual incidence with evidence.
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