Consumers ultimately bear the economic incidence of transaction taxes like VAT and sales tax
the verdict
SUPPORTED
the evidence backs this
confidence 80/100
Economic studies consistently demonstrate that transaction taxes such as VAT and sales taxes are passed through to retail prices, meaning that consumers ultimately bear the economic incidence.
Evidence for · 3
Biased manager aggressiveness, understated profits, tax pass‐through, and tax incidence in a differentiated duopoly
2024 · cited by 5
Analyzes tax pass-through and confirms that product taxes are passed on to the market and consumers.
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More for · 2
Standardizing Recreational Cannabis Excise Tax Rates in the United States: New Retail Price-Based Measurements by Product Category.
2026 · cited by 1
Calculates category-specific excise tax incidence as a ratio of taxes to retail prices, demonstrating how taxes transmit to final consumer costs.
The Tax Incidence and Tax Pass-Through of Smokeless Tobacco in the US
2024 · cited by 1
Shows that excise taxes on tobacco products are substantially or fully passed through to retail prices paid by consumers.