People tend to think that income taxes lower your salary. While in practice employers know exactly for how little money (in hand) you are willing to work and in absence of income taxes would just pay this much less so that your money in hand is the same.

As an employee you should fight for income taxes to be as high as possible since they are neutral for you and might fund useful things for all. When left in the pocket of your employer they just become their takeaway. Employers won't spend it on improving the company if they don't have to. And the only things that force them to spend money in a predictable manner is regulation and markey opportunity to earn more. When they have those needs they mostly do it with credit anyways.

Conversely as an employer you should advocate for lowest income taxes possible for your workers.

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rahimnathwani 2 hours ago | parent | next [-]

You're suggesting that 100% of the income tax burden is shifted from employees to employers.

The incidence of taxation (which party bears the burden of the tax, irrespective of who 'pays' it) is widely studied. As it relates to payroll taxes (paid by the employer) and income taxes (paid by the employee) most research finds that employees bear most (but not all) of the burden. This is the opposite of your claim.

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scotty79 an hour ago | parent [-]

It's not shifted. It's just there. It was never on the employees. Employees don't have their own money to tax. Employees money is employers money. That's its source.

Employees get taxed when they spend money by being consumers. Sales taxes and VAT are their tax burden. But income taxes of the employees are the burden of the employer. It's employer who has to fork that money because otherwise he wouldn't be able to pay enough so that the employee agrees to work.

	▲	verteu 36 minutes ago \| parent [-]
		The poster is referring to https://en.wikipedia.org/wiki/Tax_incidence

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iugtmkbdfil834 an hour ago | parent | prev [-]

It has to be Sunday, because I don't that kinda of argument on a regular work day. It is almost 4chan level argument that simply does not make sense, but is somehow presented as if it was a simple matter of fact. Please tell me that you were joking and I was simply not in on it.

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scotty79 an hour ago | parent [-]

Just imagine what would happen if income taxes for employees were reduced to zero. If you think employees would have that much more money you don't think straight. Employers don't pay workers as much as they can. They pay them as little as they can and that mostly doesn't change with the tax rate.

That's all you need to know to understand the actual mechanics in presence of misleading labels. Nominally income tax (of employees) is just a tax on purchase of labor.

Another angle you could use to understand this is that reduction of income tax (for bottom 90% of earners) promotes employment. Why is that? Beacuse it makes the labor cheaper.

	▲	verteu an hour ago \| parent \| next [-]
		No, that's not what the evidence shows, eg: https://www.sciencedirect.com/science/article/abs/pii/S00472... > Gruber is able to identify incidence on gross earnings as well as on employment by exploiting variation in payroll tax changes between firms. The benefit of the payroll tax cut is found to have been fully shifted to workers through higher earnings, with no significant employment effects. With similar objectives, Anderson and Meyer, 1997, Anderson and Meyer, 1998 use US firm-level micro data to measure the effects of changes in an experience rated Unemployment Insurance system. Payment variation between firms, due to the number of workers laid off subsequently claiming UI benefits, allows identification of the incidence of the tax on earnings. At the four-digit industry level, Anderson and Meyer find full shifting of the burden of higher payroll tax from employers to workers in the form of lower earnings. They report insignificant employment effects. We find strong evidence of partial shifting of the burden of income tax from worker to employer. Although income tax is incident on equilibrium wages, the tax burden is not fully shifted.
	▲	an hour ago \| parent \| prev [-]
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