tax incidence

tax incidence definition - business

tax incidence

The relative burden of a tax among different groups. For example, people with large vehicles who drive a lot of miles pay a larger than average share of a gasoline tax. Tax incidence is an important consideration in tax policy because it affects how people act. A higher gasoline tax is likely to result in people choosing to drive less and to do so in more fuel-efficient vehicles. Also called incidence of tax.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.