The company does not pay payroll taxes. Individuals pay those taxes.

It doesn't actually matter that much who actually writes the check to the government (although in the US, both parties pay taxes).

Either way, the total cost of employment is higher for the employer than the after-tax income of the employee.

It matters alot. Both the employee and employer are benefitting from government spending, the employee shouldnt have to foot the whole bill. That is dytopian

If corporations were able to operate in a high trust fashion and actually take responsinility for their tax burden properly, instead of trying to shirk it, then this policing wouldnt be needed, but we dont live in that world

Suppose amount of money an employer is willing to pay for an employee is $100,000. For the employer, if there is a $20,000 payroll tax, then the employer would only pay the employee $80,000 to keep the total cost at $100,000. If the employee pays the tax, then the employer will pay the employee $100,000, then the employee pays $20,000 and has $80,000 after taxes. Either way the employer pays $100,000 and the employee gets $80,000. It doesn't matter which party is paying the government $20,000*.

Now, there are other tax schemes that aren't based on how much an employee is paid, but that is a completely different matter.

And FWIW sales/vat tax is somewhat similar. It doesn't matter if the buyer or the seller pays the tax, either has the same effect on the total amount paid.

For anyone wanting to read more on the topic:

https://wikipedia.org/wiki/Tax_incidence

It’s split but the company pays more. Both pay SS and Medicare. Company also pays unemployment.

Software developers are already too expensive in US, so this applies some downward pressure on those salaries. Frankly the economy will be much better off when tech salaries equalize across geos, thus avoiding the deep whole US manufacturing is in (for example, manufacturing wages in Vietname are one tenth of US manufacturing wages, and thus it is better to open new plants there).

If you want equalized poverty, feel free to move to the EU. Say goodbye to owning a nice house, or building any kind of wealth - that's reserved for the old money class.

In the US, software is one of the few remaining ways to achieve the American dream. I came to this country to work hard and earn money.

Weird, I live in the USA make $180k yet still can’t own a house and building wealth is extremely hard.

EU has better societal benefits than the US (access to healthcare, education, mandated vacation time (often starting at 3-4 weeks).

The vast majority of people care about living a life without suffering. In the US this is only reserved for the rich it seems.

What part of the country and what is your take home? Monthly expenses? $180k can be a lot depending on your location.

Exceptions are HCOL tech hubs, but comp in those places is much higher.

I live in Boston where I make double(-ish) the household median income ($80k to $100k). For individual median incomes, I make $140k more. I'm able to save over half my monthly income and it's still not enough. I absolutely can't imagine living in this city on anything less and I don't exactly live a life of exuberance here.

This is the sign of a broken economy.

I don't think we share the same definition of poverty.

I'm in the EU. You have no idea what you're talking about.

Yeah, make everybody equally poor. That'll solve things.

If you look at happiness and indexes versus taxation rates - yes, making everybody poorer does tend to solve things. Not too soon in the growth curve - but certainly not never.

Those two scenarios are only comparable if you isolate happiness and taxation and completely ignore things like social services and inequality.

I think you're referring to Nordic countries which consistently rank as the happiest countries and also have relatively high tax rates (4 of 5 Nordic countries rank in the top 11 tax rates globally. Norway has oil.) The high taxes that "make everybody poorer" also fund extensive social services that contribute to happiness.

However, this conversation is about making (a class of) workers poorer by using tax policy that puts downward pressure on their salaries. Tax revenues will stay the same, so social services will not be increased. Economic inequality increases because the workers became poorer, the C-Suite and Board Members don't.

If Joe's plumbing hires an assistant plumber, they get to fully deduct the assistant's salary.

Why do I, the hardworking tax payer, have to subsidize Joe Plumber, who already has a big house with a pool?

In some parts of the world we have a sales tax which is a form of minimum tax on business outputs. The consumers of plumbing and software pay 10% regardless on a businesses profitability.

Yeah, VAT would help tremendously in alternative here, but for gestures at United States sociopolitics reasons the existing U.S. taxation methods can’t keep up and won’t be repaired any time soon. I could boil the ocean on this down to bedrock (citizens should be taxed on [redacted] in excess of threshold, services and goods should be VATed) but I stand by “section 174 with a sub-100% cap” as what at minimum would have balanced research and taxation.

In many parts of the US there are sales taxes, but they are state or local taxes, not federal taxes.

Joe's plumbing doesn't have to pay those taxes. Operational costs, including paying employees for normal operations, is deductable.

But with the change, the cost of R&D employees is now only partially deductible (right now, you can eventually deduct the full amount over the course of several years), and software development has to be considered R&D.