The concept that determines who bears the economic burden of a tax is known as?

The concept that determines who bears the economic burden of a tax is known as tax incidence. This refers to the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence considers how the burden of a tax is distributed between different groups, such as consumers and producers. It examines who ultimately pays the tax in terms of reduced income or increased prices.

Understanding tax incidence is essential as it reveals the actual economic impact of taxation beyond just the legal obligations of tax payments. For instance, even if a tax is levied on producers, some or all of that burden might be passed on to consumers in the form of higher prices, or it might reduce producers' profits. Thus, tax incidence provides insight into real economic behaviors and relationships related to taxation.

The other concepts listed do not directly address who bears the burden of a tax. Tax efficiency relates to how a tax can maximize revenue with the least distortion to the economy. Tax bracket refers to the income range that determines the applicable tax rate for individuals and businesses. Tax rate simply indicates the percentage at which income or profits are taxed, without providing context about burden distribution among stakeholders.