The person who pays a tax directly to the government always bears the economic incidence of the tax.

Question

Quizplus · Accepted Answer

The economic incidence of a tax, which refers to the actual distribution of the tax burden, can fall on someone other than the person who initially pays the tax to the government. This is because taxes can alter market behaviors and lead to changes in prices, wages, and rents, thereby shifting the tax burden to others.

The Person Who Pays a Tax Directly to the Government