Affiliation:
1. Georgia State University, USA
Abstract
The focus of this chapter is on the incidence of taxes in Jordan. All taxes must ultimately be paid by someone, and one of the most fundamental questions asked by economists is: “Who bears the final burden of a tax?” Taxes cause individuals and firms to change their behaviors, and the resulting changes in product and factor prices will affect the incidence and the distributional effects, of the tax. The answer to the question “Who bears the burden of the tax” requires us to estimate whether or not taxes are regressive; that is, do taxes as a share of income decrease or increase as income increases? This type of analysis is important for a country like Jordan, which is seeking to increase public revenue and encourage economic development. The analysis is also useful as a model for other countries in this important region.