tag:blogger.com,1999:blog-4588709444841156892.post2971454726401360809..comments2023-09-27T05:07:57.139-04:00Comments on The Dismal Political Economist: The New England Journal of Medicine: The Economics of Financing Medicare Tells Us What We Already Know, and Gets Some of That WrongDavid Ricardohttp://www.blogger.com/profile/03733100135827552933noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-4588709444841156892.post-90279546876072598892011-07-16T23:35:32.982-04:002011-07-16T23:35:32.982-04:00"No, the employer portion of the payroll tax ..."No, the employer portion of the payroll tax is not born by the employee. Reduce the employer portion of the tax (as happens with high income individuals once they reach the SS max) and see what happens to compensation. Nothing."<br /><br />I think that you are wrong on this. From the employer's standpoint, the employer's contribution is fungible with salary as a component of his cost of hiring the employee. So (a) for an employee to be hired s/he has to do work that actually earns profits proportional to salary plus other costs, and (b) in a context where employees are represented by an effective union, they would be able to demand old salary + employer's savings due to changes in the tax code. So the company employee's situation really is identical to the self-employed person's situtation, which is that we both have to actually do work that results in earning all of the "payroll" taxes. That really is our money.David Littleboyhttp://www.pbase.com/davidjlnoreply@blogger.com