I have heard different individuals say that taxes are ultimately passed on to the consumer, such as Bastiat, and others such as Rothbard to deny that they are.
What is Hayek and von Mises position on this issue of whether taxes are or are not passed on to the consumer? If you can please cite the source of your information I would appreciate it.
This issue comes up often in discussions about taxing the rich. One of the arguments of those who are against tax the rich schemes is that taxes are ultimately passed on to the consumer in the form of higher prices.
This makes sense because taxes increase the cost of production for a business, and marginal producers who are not able to absorb the tax will be driven out of business leading to a reduction in supply leading to higher prices in the long-run. (note that I am not saying cost determines price.)
They are also passed on to the consumer by withdrawing valuable capital from other fields where they would have been more profitably employed was there not an artificial increase in the cost of production imposed on businesses through higher taxes.
Since men produce in order to consume, the lower the cost of production the better off they are. As a result, every increase in the cost of production hurts the consumers.
This is the line of reasoning that exists in my head on this issue.
Thank you.
Who's "the consumer"? Isn't every producer also a consumer? If not, why produce? Isn't every consumer also a producer? If not, what is he consuming apart from income/profit realized by producing something someone else wanted? Taxes are costs "passed on" to anyone who is not the tax collector.