Tax incidence most accurately refers to

Question

Quizplus · Accepted Answer

Tax incidence refers to the distribution of the real burden of a tax. It is the final impact of the tax burden on different individuals or groups in the economy, regardless of who actually physically pays the tax to the government. Therefore, option B is the correct answer.

Option A refers only to the taxpayers, not the burden of the tax, and option C is too specific to state and local governments. Option D refers only to the ratio of taxes paid to taxable income, which does not necessarily reflect the impact of the tax on different groups.

Tax Incidence Most Accurately Refers to