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To: Kellis91789
If we eliminate the worker-side of the FICA, but expand the employer-side to include all employee compensation — meaning not just wages up to $106K/yr, but all wages, all non-cash benefits like health and life insurance, company vehicle allowances, stock options, etc. — and up the rate to 10%, the revenue collected from the employer would collect $850B/yr.

Hey, no big deal, right? I mean, I'm sure the employers are just rolling in cash, so there would be no problem in increasing the cost of employing people. We hear the leftists screaming about how the employers are just sitting on all this cash, refusing to hire people. I wonder how many people would lose their jobs due to a plan like this? You propose boosting the employers' share of FICA and Medicare from roughly 7.5% to 10%, and increasing the tax over all the employees' compensation! Plain and simple, you need to look at the total cost of an employee to the employer, NOT just their salary. This includes ALL the taxes... Not just FICA, but unemployment insurance, workmans comp insurance, etc... The government has a problem understanding that employers do NOT provide jobs... Employers hire people and compensate them based on the value they can bring to the company through the goods and services they produce.

Mark

32 posted on 10/25/2011 9:42:30 PM PDT by MarkL (Do I really look like a guy with a plan?)
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To: MarkL

Nonsense. We all know the business just passes along its costs to the consumer, provided they can still compete when charging higher prices. Applying a factor of 1.10 to a salary vs 1.0765 will be more than compensated for by the savings on profit taxes. Roughly the same total tax will be paid by employers as currently, but the emphasis is placed on profits and getting the most productivity out of employees, rather than subsidizing unprofitable employers and unproductive workers. Their competitiveness will be improved by applying the payroll tax to embedded labor in imports.

“I wonder how many people would lose their jobs due to a plan like this?” Answer: None. There will be huge job growth as employers no longer have to worry about their taxes. Everything is known upfront. Any employee will cost 1.10x their compensation package. Period. No tax planning, no depreciation schedules, no 67,000 pages of tax code to try to game, just how best to make a profit. Business would flock to the USA as the most business-tax friendly country.

As far as applying the tax to all payroll costs instead of just wages goes, this means eliminating the myth that low-wage employees are under-compensated employees. It is dishonest to say an employee makes $20K when they also get $15K in employer-provided yet untaxed benefits. That employee costs the employer $35K in compensation and they should be paying payroll taxes on the full amount. Otherwise, the government is favoring the business that provides non-cash benefits over the employer who pays the employee the full $35K without benefits and let’s the employee choose what benefits to buy for himself. The government should not be favoring policies that take choices away from the employee.


35 posted on 10/25/2011 11:27:49 PM PDT by Kellis91789 (There's a reason the mascot of the Democratic Party is a jackass.)
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