Question 1
The ultimate burden of the corporate profits tax appears to depend on all of the following
except
◦ the relative capital/labor intensity of the corporate and noncorporate sectors.
◦ the ease with which capital and labor can be substituted in the corporate and noncorporate sectors.
◦ the elasticities of demand for the products produced in the corporate and noncorporate sectors.
◦ the tax rate structure of the corporate profits tax.
Question 2
Arnold Harberger's study on the incidence of the corporate income tax concluded that the burden of the tax is borne
◦ by corporations in the form of lower profits and by consumers in the form of higher prices.
◦ by consumers in the form of higher prices and by workers in the form of lower wages.
◦ only by noncorporate firms in the form of higher capital prices.
◦ by owners of corporations, proprietorships, and partnerships in rough proportion to profits.