Tax students who have studied the distribution of the consumption tax load attack it theoretically from the angle of its effect on prices. The problem, thus, becomes one of incidence in the narrower economic sense of the word.1 Studied from this point of view, the variables which must be analyzed differ depending on the approach adopted. One stimulating and significant study2 places primary emphasis on whether the taxpayer subject to a commodity tax is a competitive or a monopolistic producer. In each instance these writers examine the problem according to the form of tax imposed-whether a specific, ad valorem, gross receipts, lump sum, or net return levy. An earlier student has suggested that the problem may be formulated in terms of whether transactions involved are all competitive, whether sellers produce at increasing costs, whether capital and labor employed in production are mobile or otherwise, and whether taxes are on the margin or on surplus.3 Still another writer has recently couched his inquiry primarily in terms of cost conditions among taxpayers.4 Some or all of these, together with other writers, also stress, among other factors, the question as to whether the taxes imposed apply to all or only a part of the competitive businesses, whether the rates are graduated,5 and how the proceeds of the taxes are actually expended.6 * A.B., I920, East Texas State Teachers College; A.M., I92I, Vanderbilt University. Director, Bureau of Business Research and Professor of Economics, University of Kentucky. Research director, Interstate Commission on Conflicting Taxation, I934-35; chairman, Tax Commission of Kentucky, 1936; commissioner of revenue of Kentucky, 1936-39. Member, President Roosevelt's Committee on Fiscal Relations between United States and District of Columbia, I936-37; American Economic Association, Royal Economic Society (England), National Tax Association, National Association of Assessing Officers, Tax Policy League (now known as Tax Institute), Tax Research Foundation. Author, reports and government publications on taxation; editor, publications of Bureau of Business Research, University of Kentucky; contributor to professional journals. The author's colleague, Mr. Glenn D. Morrow, has aided greatly in the preparation of this paper. See, e.g., Kendrick, Incidence and Effects of Taxation (1937) 27 AM. ECON. REV. 725. Fagan and Jastram, Tax Shifting in the Short Run (I939) 53 Q. J. ECON. 562. See also Discussion (I940) 54 id. 665. 3 Edgeworth, Pure Theory of Taxation (Mar. I897) 7 ECON. J. 46, reprinted as first half of The Pure Theory of Taxation, in 2 EDGEWORTH, PAPERS RELATING TO POLITICAL ECONOMY (1925) 63. 4 Gilbert, Shifting of Sales Taxes (1939) 53 Q. J. ECON. 275. Since most sales taxes are imposed at flat rates, this inquiry is largely irrelevant to the present immediate problem. 6 In the last connection attention should be directed particularly to the stimulating discussion by Kendrick, Public Expenditure: A Neglected Consideration in Tax Incidence Theory (1930) 20 AM. EcoN. REV. 226, despite the fact that Kendrick, in common with Buehler, Public Expenditure and the Incidence of Taxes: Some Theoretical Considerations (I938) 28 AM. ECON. REV. 674, appears to have neglected