Answer to Question #89706 in Economics for mikaelah

Question

“The personal income and payroll taxes are already too high. I think business should shoulder a larger share of the tax burden.” Have you ever heard a politician make a statement like this? Does the statement reflect sound economics? Why or why not?

Answer 1

This statement reflects sound economics, but in reality there are much more factors, which determine the tax rates and the amount of burden, like elasticity, type government fiscal policy used etc. So you can't just decrease one taxes and increase the other, because it may cause unpredicted changes.