[Vigilanteman]

About 150,000 J-1 visas were given out in 2008. Businesses save about 8 percent by using a foreign worker because of Social Security and other taxes they do not have to pay.

And right there is the gist of the problem. They can legally work them for 8% less than locals.

In Japan, foreign workers are much fewer in number (I was one of them) and actually grateful to the host country for the opportunities offered because companies have to pay them at least a 10% premium over what it pays to the locals.

[Oceander]

So? The J-1s don’t have to pay the employee side, either. And, quite frankly, it doesn’t make that much difference because what matters is not who writes the check, but who loses the economic value, when a tax is paid, and as numerous studies have found, the employees generally end up bearing the economic burden of the payroll taxes, regardless of who has to write the check to Uncle Sugar.

In other words, even though those employers don’t have to write those checks, they aren’t significantly better off in terms of wealth than the employers who do have to write those checks because, at the end of the day, it’s the employees who are bearing the loss of wealth that goes to pay those taxes.

[Oceander]

Just to put a little bit of money where my mouth is, this Heritage article mentions some of the studies that I mentioned and gives a reasonably decent summary of the complex issues surrounding the economic incidence of taxation. I'd recommend it for those who want to think about tax policy matters.