Core Concepts: The Economics of Tax Incidence
December 13, 2008 Leave a comment
All good economics starts with theory. The world is a complicated place—far too complex to make sense of directly. Economic theory helps collapse that complexity into a few key relationships we can work out mathematically and check against the facts. The first step in every analysis is to sit down with pencil and pad to work out the theory.
To help our clients better understand the economic theory underlying our work, we’ll be posting an ongoing series of articles titled “Core Concepts.” The goal is to provide a collection of simple and brief introductions to the core theoretical concepts used by Chamberlain Economics, L.L.C.
As the first in the series we’ve posted “Core Concepts: The Economics of Tax Incidence“. The piece is designed as a refresher on the basics of tax incidence, and how it’s derived analytically from elasticities of supply and demand in the marketplace. This idea serves as the foundation for nearly all of our work on tax modeling and policy analysis.
