Reply To: Tax Shifting

#18024
jmherbener
Participant

Labor is the only category of producer good that must have an opportunity cost because of the personal use value of leisure foregone. But other resources could have personal use value to their owners and therefore, could have an opportunity cost that is more valuable to their owners than the after-tax income. For example, a landowner could own land that he uses for his personal ends instead of leasing it to a farmer when the tax lowers the lease payment.