It is generally believed that a tax levied on sellers of some commodity is at least partly paid by buyers if its price rises. Based on the formal treatment of purchasing power, this paper demonstrates that such "shifting of tax burden'' does not occur in principle. Thus indirect taxes that assume such shifting are no different from direct ones in respect of tax payment: sellers pay the whole tax, and buyers only suffer a diminution in the value of their monetary assets by the price rise. We show a possible cause of the misconception is cognitive biases, including money illusions. We also examine how tax payment and economic incidence differ, and show that economic incidence, the widely accepted measure of changes in welfare, cannot be a yardstick for evaluating ``who pays the tax" at the same time. We discuss some other types of taxes that are remitted to the government by those who are different from ones supposed to pay the taxes, such as withholding income taxes, and show that they are paid as intended (i.e., paid by employees in the case of withholding taxes) owing to the explicit designation of taxpayers by law, in contrast to "indirect" taxes.
JEL Classification: H20 , H22 , K34