On the Shifting and Incidence of Taxation

Edwin Robert Anderson Seligman's work, On the Shifting and Incidence of Taxation, is a foundational text in public finance, particularly concerning how the economic burden of taxes is distributed. Seligman, an American economist and educator, explored the concept that the person legally responsible for paying a tax may not be the one who ultimately bears its cost.123

The book delves into how taxes can be "shifted" from one party to another. This can occur forward, where a business passes the tax cost to consumers through higher prices, or backward, where the burden falls on producers through lower wages or prices for raw materials. Seligman also examined tax capitalization, where a tax's burden is absorbed into the value of assets, and the complexities of determining the true economic incidence of a tax, which depends on various market forces and adjustments. His theories influenced government policy, especially regarding progressive taxation.231