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Who pays the income tax, the payroll tax, the estate and gift taxes? Who bears the burden of the gasoline and tobacco taxes? If Congress were to raise this tax rate, or lower that tax deduction, who would gain and who would lose? The outcomes of the political battles over changes in the tax system often hinge on the answers to such questions. This paper will discuss the economic consequences of taxation and the factors that influence where the burden of various taxes really falls. It will review some of the discussions in the economic literature. Finally, it will suggest that a shift to a markedly different type of tax system would benefit all players in the economy.

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