That doesn't even get to the half of it. The word tax incidence is non-existent in the minds of average people.
If for example a government implements a payroll tax of 10% that must be paid for by the employer, the average person with a salary of $50,000 believes they aren't paying any tax. In reality (making some economic assumptions), what has happened is that the person's salary is 95% (5% less) of what it should be so people are taxed $2600; however, your average person has no clue that this is what has happened.
In this regard, governments and rich people are able to hide taxes in a manner that the average person has 0 clue about.
This is just one example but there's 1000s of examples in the tax code. If it's a tax on business/rich people, you can bet 99% of the time the person actually paying the tax effectively is the poor/middle-class not the business/rich person.
Most people don't actually understand inflation. In theory, inflation doesn't matter but it does matter because of the timing of when inflation occurs.
Basic example of the in theory inflation that doesn't matter: Inflation goes up by 2%. Your wages go up by 2%. In effect, nothing changes.
Basic example of what actually happens: Central bank lowers interest rates to increase inflation. The lower interest rates reduce the cost of borrowing. A business takes on more debt to invest in a new project due to the lower cost of borrowing. Now keep in mind, banks are collateral based lenders and don't generally lend for labour costs because there's no security. That means the first people to benefit from lowered interest rates are the businesses who purchase equipment, etc... to expand their business and that money then circulates to other products and services thus impacting inflation. The last people to benefit from money entering the economy this way is the labouror. By the time inflation catches up to the labourer, the owners of businesses have already benefited from additional money at reduced costs and non-inflationary prices for the capital they've invested in. Meanwhile labourers haven't had their wages raised until after prices of the products/services they purchase have already gone up.
The end result is that in theory inflation doesn't matter but in actual practice inflation when managed by a central bank benefits the business owners at the expense of the labourers. This problem is compounded when the labour pool includes immigrants because the supply of labour is so large that wage simply don't adjust to accommodate what the other inflationary pressure are.
Most countries hide their taxes in the listed price. They say that our system confuses the customer, but it could also be considered a learning tool.
That doesn't even get to the half of it. The word tax incidence is non-existent in the minds of average people.
If for example a government implements a payroll tax of 10% that must be paid for by the employer, the average person with a salary of $50,000 believes they aren't paying any tax. In reality (making some economic assumptions), what has happened is that the person's salary is 95% (5% less) of what it should be so people are taxed $2600; however, your average person has no clue that this is what has happened.
In this regard, governments and rich people are able to hide taxes in a manner that the average person has 0 clue about.
This is just one example but there's 1000s of examples in the tax code. If it's a tax on business/rich people, you can bet 99% of the time the person actually paying the tax effectively is the poor/middle-class not the business/rich person.
Add in the reality of inflation because currency has no intrinsic value.
Most people don't actually understand inflation. In theory, inflation doesn't matter but it does matter because of the timing of when inflation occurs.
Basic example of the in theory inflation that doesn't matter: Inflation goes up by 2%. Your wages go up by 2%. In effect, nothing changes.
Basic example of what actually happens: Central bank lowers interest rates to increase inflation. The lower interest rates reduce the cost of borrowing. A business takes on more debt to invest in a new project due to the lower cost of borrowing. Now keep in mind, banks are collateral based lenders and don't generally lend for labour costs because there's no security. That means the first people to benefit from lowered interest rates are the businesses who purchase equipment, etc... to expand their business and that money then circulates to other products and services thus impacting inflation. The last people to benefit from money entering the economy this way is the labouror. By the time inflation catches up to the labourer, the owners of businesses have already benefited from additional money at reduced costs and non-inflationary prices for the capital they've invested in. Meanwhile labourers haven't had their wages raised until after prices of the products/services they purchase have already gone up.
The end result is that in theory inflation doesn't matter but in actual practice inflation when managed by a central bank benefits the business owners at the expense of the labourers. This problem is compounded when the labour pool includes immigrants because the supply of labour is so large that wage simply don't adjust to accommodate what the other inflationary pressure are.