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Economics
Tax Incidence
Who actually ends up paying a tax — the buyer, the seller, or both — even if the law says one of them has to send the money.
Tax incidence depends on who is more sensitive to price changes (elasticity). The side that can't easily avoid the tax usually ends up paying more.It's like when Mom says 'you're paying for dinner' but you both end up splitting the bill anyway.
Real world: When the government puts a tax on cigarettes, smokers pay most of it through higher prices, even though the stores are the ones mailing the tax check.
💡 Don't get fooled by who writes the check — tax incidence shows the real economic burden, and it's often different from what politicians say.