In the United States, payroll taxes are essentially assessed evenly between workers and firms.If the supply of labor is less elastic than the demand for labor, are workers or firms more likely to bear the additional burden of an increased payroll tax in the United States?Could this burden be shifted to the firms by assessing the increase in payroll taxes on just firms rather than having firms and workers continue to be assessed payroll taxes equally?

Labor supply refers to the supply of labor in the market who are ready to do the job at the given…

Answered: In the United States, payroll taxes are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the United States, payroll taxes are essentially assessed evenly between workers and firms.

If the supply of labor is less elastic than the demand for labor, are workers or firms more likely to bear the additional burden of an increased payroll tax in the United States?
Could this burden be shifted to the firms by assessing the increase in payroll taxes on just firms rather than having firms and workers continue to be assessed payroll taxes equally?

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