[DesertCat]

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effectively out of pay you would have recieved if it werent for the tax.

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When I owned several businesses I never passed on savings to employees just because I saved them, whether they were from tax breaks, volume purchase savings or any ther type. Hard to believe any reasonable for profit business owner would either.

Other than picking that nit I understand your point and agree that it is obvious without any advanced calculations at all that more people pay more in payroll taxes than income tax. After all fortunately there are more poor people than rich ones.

Jimbo

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I always get that reaction from fellow small business owners. Its a natural reaction, but aside from being a basic tenet of economics let me explain it to you another way. Presume you offer a $50k per year salary with a new employee. It's really a market rate, if the employee demands more you can get someone else and if you try to pay less he has other job offers at thst rate. Before he starts work the government suddenly imposes a $4k employer paid payroll tax. You tell the employee you only think his labor is worth $50k total and can only pay him $46k. He gets angry and calls his other job offers, he'll find they have suddenly dropped $4k as well, they cant pay any more than their original costs either (or they would have bid more before the tax was imposed).

Employer paid payroll taxes are paid by employees in the form of lower wages. It may not be as clean as my example, some employers may eat part of the tax when its imposed but over time a supply demand curve that intersected at $50k will now intersect around 46k. I say around because the supply demand curves are altered