The economic burden of a tax is the:
A)government-designated burden of a tax payment.
B)burden created by the change in after-tax prices faced by buyers and sellers.
C)percentage increase in the tax on an item.
D)laws governing sales taxes in a country.

Question

Quizplus · Accepted Answer

The economic burden of a tax refers to the change in after-tax prices faced by buyers and sellers, which affects their behavior and ultimately leads to a loss in producer and consumer surplus. This burden is not the same as the government-designated amount of the tax payment, nor is it simply a percentage increase in the tax rate. Laws governing sales taxes in a country may have an impact on how the tax burden is distributed, but they do not determine the burden itself.

The Economic Burden of a Tax Is The