The current payroll tax is 7.65% on both employers and employees (as of 2013). Who do you think bears the economic burden of this payroll tax—firms or workers? Why?
economics
Description
Review “Can Congress Distribute the
Burden of a Payroll Tax?” on p. 125 of Principles of Microeconomics.
·
The current payroll tax is 7.65% on both
employers and employees (as of 2013). Who do you think bears the economic
burden of this payroll tax—firms or workers? Why? Using the tax incidence
approach, support your answers using economic principles.
·
How does the economic burden shift when the
unemployment rate is 5%, as contrasted to an unemployment rate of 9%?
Explain.
·
In your analysis, does it make any difference on
this division of the tax burden between workers and firms if the government
levies the tax on workers, levies the tax on firms, or divides the tax between
the two groups? Why or why not?
Format
your case study consistent with APA guidelines.
Please be sure to cite the book being used along with other sources in APA format:
Mankiw, N. G. (2015). Principles
of microeconomics (7th ed.). Stamford, CT: Cengage Learning.
ISBN-13: 9781285165905
