IDEAS home Printed from https://ideas.repec.org/a/anr/reveco/v17y2025p615-634.html

Tax Incidence Anomalies

Author

Listed:
  • Youssef Benzarti

    (National Bureau of Economic Research, Cambridge, Massachusetts, USA
    Department of Economics, University of California, Santa Barbara, California, USA)

Abstract

This article reviews the literature on the incidence of commodity and labor taxes and focuses on empirical results that show stark departures from the canonical model of tax incidence, which I refer to as anomalies. In particular, there is mounting evidence questioning three fundamental implications of the canonical model: (a) that statutory incidence is irrelevant for economic incidence, (b) that the relative magnitude of the demand and supply elasticities is a sufficient statistic for tax incidence, and (c) that tax incidence is symmetric for increases and decreases. I review this empirical evidence and draw implications for the canonical model's relevance.

Suggested Citation

  • Youssef Benzarti, 2025. "Tax Incidence Anomalies," Annual Review of Economics, Annual Reviews, vol. 17(1), pages 615-634, August.
    • Handle: RePEc:anr:reveco:v:17:y:2025:p:615-634
    DOI: 10.1146/annurev-economics-081324-085805
    as

    Download full text from publisher

    File URL: https://doi.org/10.1146/annurev-economics-081324-085805
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    File URL: https://libkey.io/10.1146/annurev-economics-081324-085805?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:reveco:v:17:y:2025:p:615-634. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.