If the corporate income tax is not shifted in the short run, then in the long run it will reduce the return to capital in the corporate sector only.

Question

Quizplus · Accepted Answer

In the long run, the corporate income tax can be shifted to other factors of production, such as labor and consumers through reduced wages and higher prices, respectively. Therefore, it can impact more than just the return to capital in the corporate sector.

If the Corporate Income Tax Is Not Shifted in the Short