When the government levies a tax on a corporation,
A)all the burden of the tax ultimately falls on the corporation's owners.
B)the corporation is more like a tax collector than a taxpayer.
C)output must increase to compensate for reduced profits.
D)less deadweight loss will occur since corporations are entities and not people who respond to incentives.

Question

Quizplus · Accepted Answer

The corporation acts more like a tax collector than a taxpayer because the burden of the tax can be passed on to others, such as consumers through higher prices, employees through lower wages, or shareholders through lower profits.

When the Government Levies a Tax on a Corporation