Lowering the tax wedge (reducing payroll and income taxes) and making labor laws more flexible does exactly that. Lowering minimum wage and increasing earned-i

Lowering the tax wedge (reducing payroll and income taxes) and making labor laws more flexible does exactly that. Lowering minimum wage and increasing earned-income tax credit (aka negative tax rate) also has a similar effect. Personally, I'm in favor of a strong earned-income program. On your second point, why should it be stopped? Actual question, interested in hearing opinions about it. Income tax by itself is highly deceptive, as it doesn't include payroll tax. Companies don't look at salaries, they look at the total cost, which includes salary, benefits, bonuses and payroll taxes/fees. The payroll taxes often aren't seen by the employees, so they feel they are being taxed less than they actually are. The impact of that can be huge. Let's compare France and Switzerland: Average yearly total cost worker: * Switzerland: 74k USD PPP * France: 63k USD PPP Average yearly gross income per worker: * Switzerland: 70k USD PPP * France: 46k USD PPP Average net income after taxes per worker: * Switzerland: 58k USD PPP * France: 33k USD PPP So out of every dollar the company spends on a worker, in France the worker gets 52% of that. In Switzerland the worker gets 78% of that. In PPP-adjusted numbers, the average worker in Switzerland makes 75% more than the average worker in France, despite costing less than 20% more. In which country do you think a company would want to hire employees? Switzerland or France? Source: OECD.