Sunday, 23 December 2012

What sets economists and non-economists apart? Tax incidence.

An old post from the excellent Chris Dillow.

I say it merely to emphasise the importance of the idea of tax incidence - that taxes don’t necessarily fall upon the people that they are formally levied upon. An inability to grasp this point is one of the features that distinguishes economists from non-economists.

The full post is here.
Here's the key point. "
92% of any rise in corporation tax falls upon wages"