Comment by fsckboy
17 hours ago
>TriMet relies heavily on payroll taxes that are deeply unpopular among the self-employed and small business owners
just a point of clarification, the term "payroll taxes" refers to Social Security and Medicare taxes that are applied to your paycheck; you don't pay them, self-employed and employers pay those. Wage-earners do not pay them directly, but do collect the social security and Medicare benefits that they pay for later in life, so in that sense it's something of a deferred bonus to workers.
Everybody also pays income taxes which are a separate set of taxes, and they are equally hated by all.
"payroll taxes" are called that because they are applied to payrolls of people who pay payrolls. Payroll taxes would not pay for things like mass transit.
> Payroll taxes would not pay for things like mass transit
In Oregon, TriMet is funded by a payroll tax: https://www.oregon.gov/dor/programs/businesses/pages/trimet-...
> The Oregon Department of Revenue administers tax programs for the Tri-County Metropolitan Transportation District (TriMet). Nearly every employer who pays wages for services performed in this district must pay transit payroll tax.
> The transit tax is imposed directly on the employer. The tax is figured only on the amount of gross payroll for services performed within the TriMet Transit District. This includes traveling sales representatives and employees working from home.
> you don't pay them, self-employed and employers pay those
If a tax is a function of the worker's income, it doesn't really matter (except for nominal terms) whether the worker or employer pays the taxes, the economic effect is the same. Who actually bears the burden of the tax ends up determined by the price elasticity of supply/demand in that labor market, and is not determined by who is on the hook for the literal payment.
>If a tax is a function of the worker's income, it doesn't really matter (except for nominal terms) whether the worker or employer pays the taxes,
yes, I took a lot of micro (and macro too for that matter) but if what you say were true, neither political party nor activists would go on and on about taxing "corporations". You should direct your comments toward the parties that do that. But of course, you would get downvoted because the parties that do that don't want to hear otherwise. That's what I was doing, trying to explain ecomonics in ways they'd be receptive to, because telling people how things work is always a good thing even if they are not ready to go all the way.
also, in terms of pure micro, indirectly taxing things is never as efficient as directly taxing them, which you are not accounting for. The inefficiency tax in the form of "lower overall employment" is not easily measured even though we know it's quite significant and as impactful as "well this tax averages out the same" when it's not the same.
Employers and employees split payroll taxes 50/50 by law. You definitely pay payroll taxes as an employee in the US.
If you are self-employed, you have to manually pay the tax because there's no employer wage to automatically deduct from.
A quick search could have resolved your confusion before commenting nonsense.
ah, good correction, that's why the self employed hate them, they have to pay both halves.
the main reason for the distaste is that self-employed people generally fall in the class of people who do a better job preparing for retirement, and the govt old age/retirement systems are not intelligently run, it's more like "money under the bed" that gets raided to pay the current generation of old people rather than being saved not saved for the future. That same money in a private insurance account would offer the better returns as investment accounts do.
the reason the retirement funds are set to go bankrupt is that there are a lot of baby boomers. This is not the baby boomers fault, when govt retirement programs were set up back in the depression era, it gave pension eligibility to people who had not paid into a retirement system, paid for by current workers, and that can kept getting kicked down the road. I don't think anybody wants to see penniless old people, they simply want a government that plans ahead and doesn't keep kicking the can down the road, and doesn't raid pension monies to use as "free money" to pay for other government pork.
No. The reason that self-employed don't like payroll tax is that they have to pay both sides of it, so it seems like more than they paid as employees.
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The OTT payroll tax isn't that onerous really. (I say this as someone who pays them for our employees.)