A Great Truism

In the literature of economics there is a lot of discussion about tax incidence. In any class on taxation, one of the immediate debates is about the corporate tax - do corporations pay taxes. Jeffrey Miron, a professor of economics at Boston University put a series of his lectures on the net on the economics of libertarianism. In his lecture #21 (on economic and social policy) he came up with a great aphorism. His initial test of incidence is "if you can't shake hands with it, it does not pay taxes." Great line. Ranks of there with one of my student's definition of the concept of epiphenomenality (A secondary phenomenon that results from and accompanies another, often unexpected) in economics as "Who'd a thunk it?"

Thanks Professor Miron - his lectures are on the net and are worth reading. They are well constructed. He also did an interesting paper on Social Security privatization where he argues that it is not a panacea although it might produce some positive results.