Suppose the government proposes a luxury tax on private jets. The demand for private jets is elastic and the supply is inelastic, at least in the short run. The tax burden will fall on:
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UoH 2021 Question 10: Taxation: incidence and efficiency
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Taxation: incidence and efficiency has come up 79 times in 7 exams since 2009.
What this question tests
This question is on Tax incidence, part of Taxation: incidence and efficiency in Public Economics.
Who actually bears a tax, whoever the law makes pay.
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