A reference to the eventual burden of a tax on those who suffer a reduction in their real income resulting from the imposition of the tax. The incidence of a tax may be quite different from the impact of taxation. For example, a sales tax may actually be levied on a wholesaler or retailer but he is able to pass on the burden of the tax in whole or in part to his customers. The more inelastic demand is and the more elastic supply, the greater the burden on the consumer. If the effect of an income tax is to reduce the supply of work effort and wage rates are pushed up, the eventual incidence might be on profit earners or, if they pass on the increased burden in higher prices, on final consumers.