What term describes the actual division of a tax burden?

The term that describes the actual division of a tax burden is tax incidence. This concept refers to who ultimately bears the cost of a tax—whether that burden falls on consumers, producers, or some combination of both. Tax incidence assesses how tax burdens are shared among various economic participants and provides insights into the effects of taxation on overall welfare and resource allocation.

Understanding tax incidence helps illustrate the dynamics of supply and demand in a market. For instance, when a tax is levied on a product, the way that price changes (and how that price change affects consumer behavior and supplier decisions) determines how the burden of that tax is distributed. The analysis can show whether consumers will pay higher prices or if producers will accept lower profits due to the tax.

This concept is distinct from tax equity, which deals with the fairness of the tax system; tax efficiency, which focuses on the economic impact and behavior changing effects of taxes; and tax base, which refers to the total amount of income or value subject to taxation. Each of these concepts serves different purposes in the analysis of tax systems, but it is tax incidence that specifically addresses the actual distribution of the burden resulting from tax policy.