Wednesday, February 29, 2012

If You Want to Create Jobs, Cut Payroll Taxes

It’s pretty simple. If you make it cheaper to hire people, employers will hire more of them. More people working means more income tax revenue. More revenue means [more to spend/more opportunity to cut taxes - take your pick], and the world is fine.

Take a look at this chart, though, and you’ll see the staggering increase in the percentage of federal revenue from payroll taxes, which, as described above, makes it more difficult for employers to expand their employee base. You’ll see that, as a percentage of overall revenue, payroll taxes have gone through the roof over the past 50 years (click on the picture for more details).

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