What are the impacts of a local employment tax on the Boulder economy?

Tax Burden Analysis

The sponsors of this study requested an independent, objective analysis of the potential impacts and outcomes of a local employment tax. This analysis included an examination of the market power of firms, employees, and customers in Boulder. The completed summary analysis provides focused, usable information to aid community and policy-level discussions. A much larger analysis based on a specific tax and expenditure levels on a firm-type basis would need to be completed to fully detail all of the complete impacts of a tax proposal.

The administrative application of this tax would suggest an equal share of the tax will be carried by the employer (firms) and the employee. However, a more thorough understanding of the marketplace shows that the tax is not "truly" paid by who bears the administrative burden. In fact, the tax burden can be shifted due to market power. The tax burden will actually fall on one of three groups: the firm, the firm's customers, and/or the firm's employees.