// definition
Tax incidence
The economic distribution of a tax burden
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Short definition
The ultimate economic distribution of a tax burden across participants. It may differ from the identity of the legally liable payer. For a tariff, price and margin adjustments can distribute the burden among suppliers, importers and customers. That distribution depends on market conditions and must be estimated.
risk atlas
Knowledge map
Intuition
The party remitting a tax and those bearing its economic cost can be different.
Related analyses
- Brazil: sharing the tariff burdenConditional tariff stacking and costs across importers, suppliers and customers.
- Tariffs: funding the cash cycleDuty deposits, customer receipts and the conditional scope of refunds.
Primary sources
- 19 CFR § 141.1The importer’s customs obligation.
- Federal Reserve, tariff pass-throughEstimated consumer-price effects of tariff changes.