Tax burden

Not to be confused with Excess burden of taxation or Tax incidence.

The tax burden is the level of effective taxation represented as the distribution of tax rates across people, households, sectors, or forms of income by the amount of their income. Tax burdens are commonly summarized as the tax revenue as a share of gross domestic product for different groups; usually as the effective tax rates paid by different income groups as a share of their income or consumption, or taxes on labor measured as a tax wedge.

The tax burden is related to but distinct from tax incidence. Incidence analysis studies how a tax may be shifted through prices and factor returns, while tax burden typically represents measured taxes paid by different income groups. The distribution of the tax burden is an important topic in public finance and is frequently discussed in relation to economic inequality, wealth redistribution, and fiscal policy.

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