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In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall" upon the group that, at the end of the day, bears the burden of the tax. The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply. For example, a tax on apple farmers might actually be paid by owners of agricultural land or consumers of apples. The theory of tax incidence has a number of practical results. For example, United States Social Security payroll taxes are paid half by the employee and half by the employer. However, economists think that the worker is bearing almost the entire burden of the tax because the employer passes the tax on in the form of lower wages. The tax incidence is thus said to fall on the employee. From Wikipedia under the
GNU Free Documentation License  mnpublius.com 453px x 769px | 61.50kB [source page] the claim In Minnesota the bottom tenth pay twice as much of their income as the top tenth and they pay two and a half times as much as the top one percent He even provides a handy chart from the study showing the backing data There it is in black and white But what he fails to mention is the page long disclaimer p 17 of the Study titled Effective Tax Rates  jackofalltradesblog.com 466px x 640px | 31.60kB [source page] Given this data you can make one conclusion Business taxes are highly regressive in nature cuts to the tax rate would benefit the lower and middle incomes and would make the overall  tcdailyliberal.com 494px x 712px | 25.70kB [source page] between 0 and 1 with 1 being the most regressive value The Suits Index shows a drastic shift in 2006 with a slightly regressive system becoming harshly regressive between 2004 and 2006 Clearly our current system is not working Something needs to be done to curb Minnesota s redistribution of wealth from the poor to the wealthy The best place to start would be a solution From Yahoo Image Search: "Tax incidence"  taxresearch.org.uk Richard Murphy Sun, 28 Feb 2010 18:20:52 GM He came to this position having failed to knock any holes in my logic on the potential . incidence. of a financial transaction . tax. on foreign currency as explained in Taxing Banks. I on the other hand have argued that sufficient data to ...  onlysoftwareblog.com Rahul Sun, 09 May 2010 19:32:00 GM They also increased their offshore component of revenues to optimise costs and enjoyed tax shelter on profits. But now, there may be limits up to which offshore component could be expanded and . tax incidence. for companies is set to ...  jijomurali.blogspot.com Murali ue, 13 Jul 2010 11:14:00 GM praised the reforms as they would do way with loopholes in the current system of taxation and reduce the . incidence. of complex litigation He, however, pointed to the need for improving the accountability of . tax. assessing officers. ... From Google Blog Search: "Tax incidence"  reason.com Thu, 17 Jun 2010 22:02:24 GMT+00:00 Reason Online While anti-tanning advocates point to studies that link tanning salon patronage to higher incidence of melanoma, there are plenty of other ways to get skin ...  tradingmarkets.com Fri, 28 May 2010 08:58:03 GMT+00:00 Trading Markets (press release) The component parts of the assumed cost of capital are; real post tax cost of equity of 7.1%, real post tax cost of debt of 2.6% and 57.5% gearing.; ...  nypost.com Thu, 10 Jun 2010 08:18:28 GMT+00:00 New York Post ... as well as the number of tort lawsuits and lawyers -- and the incidence of "judicial hellholes" that routinely and outrageously favor plaintiffs. ... From Google News Search: "Tax incidence" Tax incidence effect on elasticity of supply Q. Hi guys I want to ask, when the supply is price elastic, and the consumer is inelastic, when there is a tax incidence, how does the effect of the tax affect the supply? Does the supply change? From wikipedia, when you look at the graph about inelastic demand, elastic supply, the supply remains the same, but I thought that if the supply was price-elastic, since the price went up because of the tax, shouldn't the supply change? Asked by BlazeFire - Thu Aug 7 02:24:30 2008 - - 1 Answers - 0 Comments A. Remember usually the tax apply to purchase of products impact only a customers and the seller or producer only is an agent of recaude. A percentage of income of producer is tax income and it must give it to government; in this transactions producers do not lose money. All this mean the elasticity of supply is not impacted for this kind of tax. There is other kind of taxes appllied only to producers, these increase the costs of produce goods and services and reduce the elasticity of supply of each producer. The changing in elasticity mean the curve of supply change too and the customers have to take new decitions in the market because now they are in front a different function of supply...the consequence will be some customers will decide… [cont.] Answered by CSI - Economics - Thu Aug 7 09:30:26 2008 How is the incidence of the tax affected by the price elasticity of demand? Q. Economics/Microeconomics Asked by Reza - Thu Jun 25 09:11:18 2009 - - 2 Answers - 0 Comments A. we all know that no matter what type of the taxation is-be it consumer tax or sales tax or anything else-the real tax is shared by the producer and the consumer. We call it tax burden in finance. which side take on more responsiblities is determined by the ratio of the elasticity of demand(Ed) and the ealsticity of supply(Es). when Ed>Es, consumers are suggested to bear a larger part of the total tax, and it is natural to get a converse conclusion when Ed ECONOMICS...HELP PLEASE?
Q. what is meant by a progressive tax? a regressive tax? a proportional tax? comment on the progressivity or regressivity of each of the following taxes, indicating in each case where you think the tax incidence lies: a. the federal personal income tax b. a 4% state general sales tax c. a federal excise tax on automobile tires d. a municipal property tax on real estate. e. the federal corporate income tax Asked by bcricus101 - Tue Jan 6 20:17:06 2009 - - 1 Answers - 0 Comments A. Progressive tax: Higher income individuals pay taxes at a higher tax rate Regressive tax: Lower income individuals pay taxes at a higher tax rate Proportional tax: All individuals pay taxes at the same rate a. Progressive: higher income individuals pay taxes at a higher rate b. Regressive: Low income individuals spend a higher portion of their income so are paying taxes at a higher tax rate than the wealthy c. Depends on your view of who drives more (and thus replaces tires more), the rich or the poor. I think it's probably about the same across classes, so this would be proportional d. Depends on how the tax is structured, but often progressive since real estate is concentrated among the wealthy and the wealthy have a higher amount of… [cont.] Answered by Jeff L - Wed Jan 7 13:55:59 2009 From Yahoo Answer Search: "Tax incidence"
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