Study on the Tax Burden Sharing between Supply and Demand--Based on a Perspective of Microeconomics

Abstract

Although a country's tax on market goods increases fiscal revenue to a certain extent, the tax burden is borne by both the supply and demand, which damages the interests of both consumers and suppliers. In the long run, government taxes on goods hurt both producers and consumers and hurt economic growth. This paper analyzes the nature of national taxation, the impact of tax burden on both supply and demand, and the relationship between tax burden allocation and elasticity of supply and demand. At the same time, this paper analyzes that the difference between the supply and demand elasticity is the main reason for the difference between producers and consumers. Finally, this paper puts forward some suggestions and countermeasures to promote economic growth and reduce the tax burden of producers and consumers.