Explain Why the Excess Burden of a Lump-Sum Tax Will

Essay

Explain why the excess burden of a lump-sum tax will always be zero.Why is the payroll tax not a lump-sum tax? Show how a payroll tax affects the wages paid by employers and received by workers, assuming that it is withheld from their paychecks.Assuming that the supply of labor is not perfectly inelastic, show how the excess burden can be measured.