People generally believe that a tax levied on sellers of some commodity is at least partly paid by buyers if its price rises. Contrary to this shared belief, this paper demonstrates, based on the formal treatment of purchasing power, that such ``shifting of tax burden'' does not occur in essence. 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. In addition, we discuss other types of taxes where a taxpayer does not deliver the tax directly to the government, such as withholding income taxes. We thereby show that the taxpayer pays the tax as intended (i.e., paid by employees in this case) owing to the explicit designation of taxpayers by law, in contrast to ``indirect'' taxes.
JEL Classification: H20 , H22 , K34