The statutory burden of a tax:
A)determines who finally pays the entire tax being levied.
B)does not change the incidence of the tax.
C)always leads to an equal allocation of the tax between buyer and seller.
D)does not play a role in determining where demand or supply shifts as a result of the tax.

Question

Quizplus · Accepted Answer

The statutory burden of a tax refers to who is legally responsible for paying the tax. It does not necessarily determine who will ultimately bear the economic burden of the tax, which is determined by the relative elasticity of supply and demand. Therefore, the statutory burden of a tax does not change the incidence of the tax.

The Statutory Burden of a Tax