Public Finance, 2nd Edition

16

THE THEORY AND MEASUREMENT

OF TAX INCIDENCE

TAX INCIDENCE: A PARTIAL EQUILIBRIUM ANALYSIS

FIRST-BEST THEORY, SECOND-BEST THEORY, AND

TAX INCIDENCE

METHODOLOGICAL DIFFERENCES IN THE MEASUREMENT OF

TAX INCIDENCE

THEORETICAL MEASURES OF TAX INCIDENCE

General Principles of Tax Incidence

The Disposition of the Tax Revenues

Welfare Measures of Tax Incidence: One-Consumer Economy

The Relative Price Measure of DiVerential Tax Incidence:

One-Consumer Economy

THE EQUIVALENCE OF GENERAL TAXES

Theorem: The Equivalence of General Taxes

MEASURING TAX INCIDENCE: A MANY-CONSUMER ECONOMY

The Individual Perspective on Incidence

The Aggregate Social Welfare Perspective on Incidence

THE HARBERGER ANALYSIS

Geometric-Intuitive Analysis

The Harberger Analytics

IMPORTANT MODIFICATIONS OF THE HARBERGER MODEL

Variable Factor Supplies

Oligopoly and the Corporation Income Tax

Heterogeneous Consumers

When a tax is levied on an economic agent, the agent is said to bear the

impact of the tax, equal to the amount of the tax payment. Economists

distinguish the impact of a tax from the incidence or burden of a tax. The

distinction is important, because the pattern of tax payments may not be a

very good measure of the true economic burdens arising from a tax. The

problem is that a tax initiates an entire chain of general equilibrium market

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