word
Tax Incidence
TAX IN-sih-dents
/tæks ˈɪnsɪdəns/Listen
Hear it in a clear American voice. Slow it down to catch each syllable.
Syllable breakdown
taxincidence
Dictionary meaning
The analysis of the actual economic burden of a tax, which may fall on different parties than the legal obligation to pay; a tax on producers may be passed forward to consumers through higher prices or backward to workers through lower wages
Examples
- Studies of the corporate tax incidence suggest that workers bear a significant share of the burden through reduced wages, not just shareholders.
- The tax incidence of a VAT depends on the price elasticity of demand; inelastic goods shift more burden onto consumers.
Synonyms: tax burden distribution, economic incidence, tax shifting
Pronunciation tips
Four syllables; stress the first and third: TAX and IN-; do not confuse 'incidence' (distribution) with 'incident' (event)
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