A43 - Labor Market Equilibrium Given: Graph shows that a payroll tax will be completely shifted to workers when the labor supply curve is perfectly inelastic. A new $2 payroll tax will lower the wage by $2, will not affect employment, and will not result in any deadweight loss. Suppose that labor supply is perfectly elastic at a wage of $10. Graph - 1 Question: What would be the effect on wages, employment, and deadweight loss from a $2 payroll tax? Show New Graph