Abstract
This paper presents a two-sector, general equilibrium model in which firms in one sector are imperfectly competitive non-profit-maximizers. The model is used to examine the incidence of a profits tax on the non-profit-maximizing firms. A crucial factor in the analysis is that the tax falls on both pure profits and normal profits. The paper shows that the possibility of significant forward shifting of such a profits tax is less likely than previous analyses suggest.
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