There Is a Difference Between Who Is Legally Required to Send

question 6

Multiple Choice

There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax.Which of the following would have the most impact on who bears the burden of an excise tax?

• A)Whether the tax is imposed by the federal government or a state government
• B)Whether the tax is based on the ability-to-pay principle or the benefits-received principle
• C)The motive for the tax.If the tax is designed to raise revenue, more of the burden will fall on firms.If the tax is designed to achieve a social objective (for example, to discourage smoking)more of the burden will fall on consumers.
• D)The elasticity of demand for the item that is taxed

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Definitions:

Required Duties

Obligations or tasks that an individual or entity must perform as mandated by law or contract.

Any Breach

Refers to the violation or infringement of any terms or conditions set out in a contract or agreement.

Discharges

Refers to the legal process by which a debtor is released from liability for certain debts, effectively wiping them out.

Promises of Performance

Commitments made by one party to carry out specific actions or tasks, usually within the context of a contract.