The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Question

Quizplus · Accepted Answer

The burden of a tax on yachts, or any luxury good, typically falls more heavily on the sellers because the demand for such goods is often more elastic. This means consumers can more easily forego purchasing these high-priced items, leading sellers to absorb a larger portion of the tax to maintain sales.

The Burden That Results from a Tax on Yachts Falls