Overview
Economic analysis of tax systems is crucial for understanding how taxes influence individual and business behavior. By examining different types of taxes, their incidence, and their effects on economic efficiency and equity, we can better appreciate the complexities of tax policy. This analysis help...
Key Terms
Example: Progressive tax system where tax rates increase with income.
Example: The burden of a sales tax may fall more on consumers than producers.
Example: A tax that raises prices and reduces the quantity sold creates deadweight loss.
Example: A tax system that charges higher rates to wealthier individuals is considered equitable.
Example: Income tax where higher earners pay a higher percentage.
Example: Sales tax that affects lower-income individuals more significantly.