The person the government sends the tax bill to is rarely the person whose wealth is reduced by the tax. Since all employers must pay payroll tax, there are few

The person the government sends the tax bill to is rarely the person whose wealth is reduced by the tax. Since all employers must pay payroll tax, there are few practical alternatives for earning a living (inelastic supply of labor), and employers are price-sensitive and will employ fewer people if they cost more (elastic demand for labor), even the employer's portion of the tax comes from wealth that would've gone to the employees. http://en.wikipedia.org/wiki/Tax_incidence http://en.wikipedia.org/wiki/Tax_incidence