Question: Current U.S. payroll tax rates are split evenly between employees and employers (each party pays 6.2%, for a total payroll tax rate of 12.4%). Suppose
Current U.S. payroll tax rates are split evenly between employees and employers (each party pays 6.2%, for a total payroll tax rate of 12.4%). Suppose a senator proposes decreasing the tax burden on working families by changing the payroll tax such that firms pay the entire 12.4%. Is this policy change likely to achieve the senators goal of increasing after-tax earnings for workers? Briefly discuss why or why not.
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