That’s what armchair tax theorists are. Consider an example from the book Garbology:
Fifteen cents [of a tax] is a relative pittance, but it does add up over hundreds of bags, and so it had an immediate impact on the behavior of Irish consumers …
…
The tax was never much of a burden because relatively few people paid it – they simply avoided the bags. The windblown litter has been curtailed. The main question among the Irish was why it had taken so long to come to their senses.
Now, I think a simple rewrite will probably make my point for me, so try this on for size:
A 10% increase in the income tax is a relative pittance. But it does add up over millions of workers, and so it had an immediate impact on the behavior of American workers …
…
The tax was never much of a burden because relatively few workers paid it – they simply avoided working. The long hours in the factories and office parks has been curtailed. The main question among the Americans was why it had taken so long to come to their senses.
The “price theory” point is that the burden of a tax has absolutely nothing to do with the size of the tax collected. When we use the term “burden” (or fancier versions of that term like waste, inefficiency or dead-weight loss) it refers to something entirely different. In fact,t he quote above makes exactly this point. The burden of a tax is how much it alters our behavior. And the author above makes exactly this point even as he thinks he is saying quite the opposite. Plastic bag users dramatically curtailed the use of plastic bags due to a small tax. In other words, due to the high elasticity of demand for plastic bag use at those margins, the small tax made people virtually stop using them. It’s no different than the point I made here about income taxes. I know of no one, not even an armchair tax theorist, who would call an income tax that prevented formal work as being “not a burden.” But change income to plastic bag or some other good and suddenly we all go haywire.
Now, unspoken here is the question of whether such a tax, with a high burden, is actually efficient. That’s a decent question for an intermediate micro student, and not one I care to bring up here as it has been the subject of far too many posts recently.
If the change in our behavior is influenced by the availability of substitutes, that might explain why a tax on the use of plastic bags could more dramatically curtail their use as compared to a tax on formal income altering the amount of work done.
“the burden of a tax is how much it alters our behavior”
one of my new favorite TUW lines. Simple & true, and highlights the necessity of abstract thinking to intelligently apply economic reasoning to any argument about tax. Unfortunately it seems to me that an appreciation for unseen costs is all but absent from the popular commentary surrounding government activity.