What is phantom tax?

Phantom taxes are taxes that are not directly paid by an individual or company, but are ultimately passed on to them through higher prices or reduced earnings. There are several ways in which phantom taxes can affect individuals and businesses:

1. Sales taxes: Businesses pass on the cost of sales taxes to consumers in the form of higher prices. This can lead to consumers paying more for goods and services, even though they may not be aware of the specific amount of the tax.

2. Corporate taxes: When businesses are taxed on their profits, they may pass on the cost to consumers in the form of higher prices. This is known as tax incidence, and it can result in consumers bearing the burden of corporate taxes even though they do not pay the taxes directly.

3. Property taxes: Landlords may pass on the cost of property taxes to tenants in the form of higher rent. This can result in tenants paying more for housing, even though they are not directly responsible for paying property taxes.

Overall, phantom taxes can have a significant impact on individuals and businesses, as they can result in higher costs and reduced purchasing power. It is important for consumers and businesses to be aware of the existence of phantom taxes and how they can affect their finances.