Which of the following statements about the company income tax is false?
A)a portion of the company income tax is paid by customers and workers of corporations
B)if the true incidence of the company income tax were widely known, the tax would be less popular among voters
C)the company income tax is the best example of the flypaper theory of tax incidence
D)all of the above are false

Question

Quizplus · Accepted Answer

The statement that the company income tax is the best example of the flypaper theory of tax incidence is false. The flypaper theory posits that taxes stick to the entity they are first imposed on, and do not get shifted to other parties. However, research has shown that the incidence of the company income tax can be shifted to customers and workers through higher prices and lower wages, respectively.

Which of the Following Statements About the Company Income Tax