In determining the incidence of the corporate income tax:

Question

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All of these parties may bear the indirect burden of the corporate income tax. Corporations may pass the tax burden onto consumers in the form of higher prices, as they increase prices to make up for the added tax. Shareholders may bear the burden of the corporate tax in the form of lower return on investment, as corporation's profits and therefore shareholder's earnings may decrease due to taxes. Corporate employees may bear the burden of the corporate tax in the form of lower compensation, as corporates may cut wages or reduce employment to make up for taxes.

In Determining the Incidence of the Corporate Income Tax