Corporations used to pay almost one-third of federal taxes. Now it's one-tenth. http://t.co/dw4tmalT98 pic.twitter.com/QFDZLF4cViAs anyone with a basic understanding of economics could tell you, it's not about who has to pay the tax, it's about who bears the burden of the tax incidence. For example, if you require employers to pay a tax on all wages paid to employees, they will be less willing to employ people and so employees will be be forced to suffer lower wages. Similarly, if you require employees to pay a tax on their incomes then they will demand higher wages to compensate and so some of the burden will be borne by employers.
— Vox (@voxdotcom) July 27, 2014
The point of this, then, is that measuring who pays taxes is pretty useless as a measure of who is actually being taxed. You can work out who actually bears the burden by measuring elasticities of the supply and demand for labour, but I've spent most of today
There is another thing I wish to say about this. About a year back, there were adverts on the sides of buses in the UK - or at least, in Birmingham, I don't know about there rest of the country - put there by Her Majesty's Revenue and Customs, advocating
The move towards the scheme being opt-in makes some sense, as does the tax relief. However, requiring both the employer and the employee to contribute achieves... what, precisely? Increased paperwork? The most charitable explanation I can think of is that this kind of "everyone contributes" is modelled on National Insurance, which was designed in a time before politicians were likely to be criticised for poor economics. (This was a time when free trade, despite having being considered a no-brainer by actual economists for more than seventy years, was still a controversial issue, so it is harder to blame David Lloyd George for the poor design of National Insurance.)