What do the French digital services tax, the employers' share of payroll taxes, and the corporate income tax all have in common? They are rarely shouldered by those entities and individuals targeted by legislators.
In 2004, economist Stephen Entin wrote, "The economic burden of a tax frequently does not rest with the person or business who has the statutory liability for paying the tax to the government." That's because taxes are paid only by flesh-and-blood individuals.
The actual incidence of any tax is not determined by the formalities of the tax code but, rather, by the realities of markets-specifically, by how sensitive buyers are to price changes, relative to sellers.
What about the corporate income tax? From Sen. Elizabeth Warren to author Marianne Williamson, Democratic presidential candidates have been telling workers that, if elected, they'll repeal President Donald Trump's 2017 tax reform.
Estimates range from 66 percent to 100 percent of the tax falling on workers in the form of lower wages.
Finally, France's government has announced that it will impose a 3 percent digital tax on the revenue of American tech giants like Facebook, Google, and Amazon.
The bottom line is that nobody can determine who truly bears the burden of a tax just by looking at where or on whom it is initially imposed, despite what the tax is called.
https://reason.com/2019/08/08/passing-laws-passing-taxes-and-passing-the-buck/
In 2004, economist Stephen Entin wrote, "The economic burden of a tax frequently does not rest with the person or business who has the statutory liability for paying the tax to the government." That's because taxes are paid only by flesh-and-blood individuals.
The actual incidence of any tax is not determined by the formalities of the tax code but, rather, by the realities of markets-specifically, by how sensitive buyers are to price changes, relative to sellers.
What about the corporate income tax? From Sen. Elizabeth Warren to author Marianne Williamson, Democratic presidential candidates have been telling workers that, if elected, they'll repeal President Donald Trump's 2017 tax reform.
Estimates range from 66 percent to 100 percent of the tax falling on workers in the form of lower wages.
Finally, France's government has announced that it will impose a 3 percent digital tax on the revenue of American tech giants like Facebook, Google, and Amazon.
The bottom line is that nobody can determine who truly bears the burden of a tax just by looking at where or on whom it is initially imposed, despite what the tax is called.
https://reason.com/2019/08/08/passing-laws-passing-taxes-and-passing-the-buck/
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