TY - JOUR AU - Fullerton,Don AU - Metcalf,Gilbert E. TI - Tax Incidence JF - National Bureau of Economic Research Working Paper Series VL - No. 8829 PY - 2002 Y2 - March 2002 UR - http://www.nber.org/papers/w8829 L1 - http://www.nber.org/papers/w8829.pdf N1 - Author contact info: Don Fullerton Department of Finance University of Illinois BIF Box#30 (MC520) 515 East Gregory Drive Champaign, IL 61820 Tel: 217/244-3621 Fax: 217/244-3102 E-Mail: dfullert@illinois.edu Gilbert E. Metcalf Room 3221 Department of the Treasury Washington, DC 20220 1500 Pennsylvania Ave., NW Tel: 202-622-0173 E-Mail: gilbert.metcalf@tufts.edu AB - This chapter reviews the concepts, methods, and results of studies that analyze the incidence of taxes. The purpose of such studies is to determine how the burden of a particular tax is allocated among consumers through higher product prices, workers through a lower wage rate, or other factors of production through lower rates of return to those factors. The methods might involve simple partial equilibrium models, analytical general equilibrium models, or computable general equilibrium models. We review partial equilibrium models, where the burden of a tax is shown to depend on the elasticity of supply relative to the elasticity of demand. In particular, we consider partial equilibrium models with imperfect competition. Turning to a general equilibrium setting, we review the classic model of Harberger (1962) and illustrate its generality by applying it to a number of different contexts. We also use this model to demonstrate the practicality of analytical general equilibrium modeling through the use of log linearization techniques. We then turn to dynamic models to show how a tax on capital affects capital accumulation, future wage rates, and overall burdens. Such models might also provide analytical results or computational results. We also focus on relatively recent models that calculate the lifetime incidence of taxes, with both intratemporal and intertemporal redistribution. Finally, the chapter reviews the use of incidence methods and results in the policy process. ER -