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Who Pays the Ticket Tax?

Author

Listed:
  • James Alm

    (Georgia State University, jalm@gsu.edu)

  • William H. Kaempfer

    (University of Colorado at Boulder)

Abstract

Since 1971, the City of Boulder, Colorado, has imposed a tax of 5% on the price of admission to all public events, including movies, concerts, and theatrical performances. However, the city has recently been sued by theater owners on the grounds that the theater owners bear the burden of the tax and that this burden represents an unconstitutional infringement on the theater owners’ freedom of speech. The claim by owners that they bear the burden of the tax goes directly to the issue of the incidence of the tax; that is, who bears the burden of the ticket tax? In this article, the incidence of the ticket tax under various scenarios is examined. The authors conclude that it is extremely unlikely that the true burden of the ticket tax falls on theater owners. Instead, it is found that consumers are almost certain to bear the burden of the tax. More generally, the authors conclude that most excise taxes should be viewed as falling on consumers despite claims by interested or disinterested parties to the contrary.

Suggested Citation

  • James Alm & William H. Kaempfer, 2002. "Who Pays the Ticket Tax?," Public Finance Review, , vol. 30(1), pages 27-40, January.
    • Handle: RePEc:sae:pubfin:v:30:y:2002:i:1:p:27-40
    DOI: 10.1177/109114210203000102
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    References listed on IDEAS

    as
    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
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    3. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    4. Peter M. Mieszkowski, 1967. "On the Theory of Tax Incidence," Journal of Political Economy, University of Chicago Press, vol. 75(3), pages 250-250.
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