Abstract
It is conventional to describe direct taxes as taxes where the person legally liable to pay the tax is also the person whose income or welfare is reduced as a result of its imposition: while indirect taxes are those where liability can be shifted to someone else. This distinction is essentially an arbitrary one. All taxes can be shifted to some degree: only in exceptional circumstances can any agent shift a tax completely. In common usage, indirect taxes are those which are paid by retailers, wholesalers or manufacturers, but believed to be shifted toward final consumers. In this entry indirect taxation is regarded as synonymous with commodity taxation.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Atkinson, A.B.., and J.E. Stiglitz. 1980. Lectures on public economics. New York: McGraw-Hill.
Diamond, P.A., and D. McFadden. 1974. Some uses of the expenditure function in public finance. Journal of Public Economics 3(1): 3–21.
Diamond, P.A., and Mirrlees, J.A. 1971. Optimal taxation and public production, Parts I and II. American Economic Review 61: 8–27 and 261–278.
Hotelling, H. 1938. The general welfare in relation to problems of taxation and of railway and utility rates. Econometrica 6: 242–269.
Musgrave, R.A. 1959. The theory of public finance. New York: McGraw-Hill.
Ramsey, F.P. 1927. A contribution to the theory of taxation. Economic Journal 37: 47–61.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Kay, J. (2018). Indirect Taxes. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_840
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_840
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences