... of economic incidence, but is this actually the case? For example if the government adds a levvy on fuel then common sense suggests that the person who pays the tax is the motorist. But is that true? If the tax is very noticeable then the motorist will cut back on their milage. That in turn effects the Petrol Station owners who will begin to order less fuel from their suppliers. BP, Shell and ESSO are then effected, experiencing a reduction and demand and a fall in profits. This, again effects shareholders and the demand for employees etc... So you can see from this example it is hard to see who ultimately bears the cost of a tax. In the rest of the essay I will try to identify the problems involved in trying to assess the incidence of the public sector budget and finally despite these difficulties can we identify ...

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