who pays taxes a short introduction to tax incidence
In economics, tax incidence or tax burden is the analysis of the effect of a particular tax on the distribution of economic welfare. The introduction of a tax drives a wedge between the price consumers pay and the price producers receive for a product, which typically imposes an economic burden on both producers and consumers. The concept was brought to attention by the French Physiocrats, in particular François Quesnay, who argued that the incidence of all taxation falls ultimately on landowners and is at the expense of land rent. Tax incidence is said to "fall" upon the group that ultimately bears the burden of, or ultimately has to pay, the tax. The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply.