Question

The concept of "tax incidence" refers to:

• A. The rate at which a tax is levied.
• B. The administrative cost of collecting a tax.
• C. The final economic burden of a tax.
• D. The point in the supply chain where a tax is initially imposed.

Answer 1

Answer:

C. The final economic burden of a tax.

• Tax incidence is the analysis of who actually bears the burden of a tax, even if it is legally levied on someone else.