The applied incidence study by Lee (2007), discussed in this chapter, assumes that personal income taxes are fully borne by the taxpayer with no shifting. However, there is some evidence provided by Schaafsma (1992) that Canadian dentists shift a portion of personal income taxes onto dental patients in the form of higher dental fees. Suppose that all highend professional labour (e.g., lawyers, doctors) is able to fully shift forward personal income taxes onto consumers. Discuss how this might affect the pattern of tax incidence represented in Figure 14.12.

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Percent 45 40 35 30 25 20 15 1990 2000 Bottom D2 10% 1995 2005 D3 D4 D5 D6 D7 Income Decile D8 D9 Next Next 5% 4% 1990 1995 95) 991 Top 1%