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Tax Incidence in a Principal-Agent Framework

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Issue:

Social Issues

 

Written by:

Joseph F

 

Date added:

September 18, 2016

 

Level:

University

 

Grade:

A

 

No of pages / words:

18 / 5010

 

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7782 times

 

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Essay content:

The purpose is to derive a testable implication to measure the incidence in this environment. 1 Introduction Tax incidence studies the economic burden of a tax. The literature has had, to some extent, an empirical approach. Most studies focus on accounting for the e?ects of taxes over di?erent cohorts of the population, between di?erent groups in the marketplace or e?ects over time to capital accumulation and the like...
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For a review of the literature see Fullerton and Metcalf (2002). The literature starts from the insight that, when lump sum taxes are not available, agents respond to any kind of statutory tax by changing their behavior to avoid the burden of it. The economic burden will depend on how prices change for each agent as a response of taxes...
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