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Payroll taxes may or may not be borne by the worker. Oversimplifying tax burden is a dishonest argument that is consistently perpetuated.

by dlp211 6y ago

jedberg 6y ago
Payroll taxes are always borne by the worker. They may not make the payments, but when I hire people, I set aside an all-in budget, and their salary is whatever is left after benefits and taxes. If the payroll tax goes up, it means their raise is smaller. That's how every business works. All per employee costs are borne by the employee one way or another.
- sokoloff 6y ago
  Exactly. There's no such thing as totally "free shipping" or "free returns" either. One way or another, the customer is paying for it.
  - dlp211 6y ago
    This is only true in the sense that there is a cost to move goods, but it is not true in the sense that retailers charge more to move the good to you. If it were, I wouldn't be able to reliably purchase goods shipped to my door for equal or less than what I pay in physical stores. When shipping is included in the price, that means that the shipper bears the cost of shipping by taking a smaller margin. If I were to bear the cost, it would appear as an explicit cost or higher prices, neither of which are happening.
    - sokoloff 6y ago
      Higher cost than what? By the same argument, customers are paying the costs for Best Buy's internal logistics and retail floor operations to enable “free browse and instant pickup”. If those costs are higher than Amazon/NewEgg's costs for "free shipping", I'd expect to see exactly the relative prices that you're seeing.
      - dlp211 6y ago
        I'm sorry, but I can't track the point you are trying to make. I'll reiterate my point that shipping is a cost that has to be paid, but who bears that cost is not necessarily the customer. If it was the case that the customer was the one bearing that cost, there would be a difference in the price you pay for goods at a physical store vs. goods shipped to your home, implicitly or explicitly. There is generally no difference, and in many cases, ship to home is cheaper because you can select from more retailers.
        jedberg 6y ago
        I think you're confusing who writes the check vs who bears the cost. The person writing the check isn't always the one bearing the cost.
        sokoloff 6y ago
        It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages. --Henry Ford
- dlp211 6y ago
  This is not evidence that payroll taxes are borne solely by the worker. I'm not claiming that workers don't bear any of the burden. Just that they don't bear all of the burden. this would be especially true in an asymmetrical payroll tax system in competitive labor markets like the Seattle Software Developer market.
  - jedberg 6y ago
    I'm not sure how a competitive labor market makes any difference. They all have to pay the same payroll taxes. If anything it's a great equalizer -- all companies must bear that employee cost. So they will all take it out of their employee's earnings equally.
    - dlp211 6y ago
      In this context, we are talking about the Seattle Head tax, which is NOT applied equally. In the larger discussion of payroll taxes, to disprove that workers bear the entire burden of payroll taxes, just go through the thought experiment where we eliminate the employer side of the SS tax and whether wages would rise 6.2%. They wouldn't. Workers were willing to work for $N previously, there is no reason that they would stop working/change jobs unless they were paid $N + 6.2%.
      - jedberg 6y ago
        Of course salaries wouldn't go up. Because you removed the cost from the equation. But now do the thought experiment where the employee must explicitly pay the extra 6.2%. Now of course you have to give them a 6.2% raise, because they would demand it to cover their increased costs.
        dlp211 6y ago
        In your thought experiment the cost isn't being borne by the worker, it's being borne by the business.

Payroll taxes may or may not be borne by the worker. Oversimplifying tax burden is a dishonest argument that is consistently perpetuated.

by dlp211 6y ago

Payroll taxes may or may not be borne by the worker. Oversimplifying tax burden is a dishonest argument that is consistently perpetuated.

jedberg 6y ago

Payroll taxes are always borne by the worker. They may not make the payments, but when I hire people, I set aside an all-in budget, and their salary is whatever is left after benefits and taxes. If the payroll tax goes up, it means their raise is smaller. That's how every business works. All per employee costs are borne by the employee one way or another.

sokoloff 6y ago
Exactly. There's no such thing as totally "free shipping" or "free returns" either. One way or another, the customer is paying for it.
- dlp211 6y ago
  This is only true in the sense that there is a cost to move goods, but it is not true in the sense that retailers charge more to move the good to you. If it were, I wouldn't be able to reliably purchase goods shipped to my door for equal or less than what I pay in physical stores. When shipping is included in the price, that means that the shipper bears the cost of shipping by taking a smaller margin. If I were to bear the cost, it would appear as an explicit cost or higher prices, neither of which are happening.
  - sokoloff 6y ago
    Higher cost than what? By the same argument, customers are paying the costs for Best Buy's internal logistics and retail floor operations to enable “free browse and instant pickup”. If those costs are higher than Amazon/NewEgg's costs for "free shipping", I'd expect to see exactly the relative prices that you're seeing.
    - dlp211 6y ago
      I'm sorry, but I can't track the point you are trying to make. I'll reiterate my point that shipping is a cost that has to be paid, but who bears that cost is not necessarily the customer. If it was the case that the customer was the one bearing that cost, there would be a difference in the price you pay for goods at a physical store vs. goods shipped to your home, implicitly or explicitly. There is generally no difference, and in many cases, ship to home is cheaper because you can select from more retailers.
      - jedberg 6y ago
        I think you're confusing who writes the check vs who bears the cost. The person writing the check isn't always the one bearing the cost.
        sokoloff 6y ago
        It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages. --Henry Ford
dlp211 6y ago
This is not evidence that payroll taxes are borne solely by the worker. I'm not claiming that workers don't bear any of the burden. Just that they don't bear all of the burden. this would be especially true in an asymmetrical payroll tax system in competitive labor markets like the Seattle Software Developer market.
- jedberg 6y ago
  I'm not sure how a competitive labor market makes any difference. They all have to pay the same payroll taxes. If anything it's a great equalizer -- all companies must bear that employee cost. So they will all take it out of their employee's earnings equally.
  - dlp211 6y ago
    In this context, we are talking about the Seattle Head tax, which is NOT applied equally. In the larger discussion of payroll taxes, to disprove that workers bear the entire burden of payroll taxes, just go through the thought experiment where we eliminate the employer side of the SS tax and whether wages would rise 6.2%. They wouldn't. Workers were willing to work for $N previously, there is no reason that they would stop working/change jobs unless they were paid $N + 6.2%.
    - jedberg 6y ago
      Of course salaries wouldn't go up. Because you removed the cost from the equation. But now do the thought experiment where the employee must explicitly pay the extra 6.2%. Now of course you have to give them a 6.2% raise, because they would demand it to cover their increased costs.
      - dlp211 6y ago
        In your thought experiment the cost isn't being borne by the worker, it's being borne by the business.