Tax incidence analysis in economics shows that the distribution of the tax burden between consumers and producers depends entirely on the price elasticity of demand and supply, not on who is legally required to pay the tax.
Consider the following statements : 1. Burden of a tax on a commodity is independent of who (buyer or seller) it is explicitly imposed upon 2. Burden of a tax on a commodity depends on the slope of the demand and supply curves
Asked in UPSC CAPF 2024 · Topic: Fiscal Policy & Revenue (Taxation System in India: Direct, Indirect taxes, and Tax Reforms (including GST))
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