Tax Incidence: General Remarks The second one says a tax system is more progressive if its elasticity of tax revenues with respect to income is higher Recall that an elasticity is defined in terms of percent change in one variable with respect to percent change in another one. 0△T (G1-x) 0 0△11 Tax Incidence: General Remarks – The second one says a tax system is more progressive if its elasticity of tax revenues with respect to income is higher. – Recall that an elasticity is defined in terms of percent change in one variable with respect to percent change in another one: ( ) ( ) v T I T T T I I I 2 1 0 0 1 0 0 = = − − % %  