Microeconomics

PURPOSE AND USE OF PAYROLL TAXES IN MICROECONOMICSABSTRACTPayroll tax revenue is a tax that is mechanically deducted from a worker s monthly remuneration to finance various governing body go such as Social warranter , Medicare and Disability amends . In it acts a taxpayer s resource for succeeding(a) benefits and it facilitates the flow of income . However , payroll taxation right forthadays had two possible negative makes : it decreases two income and demand for laborDISCUSSIONA payroll tax is a percentage amount of funds of money that is need by law to be automatically deducted from worker s monthly income . The taxes collected are allocated for government run such as Social Security Medicare and Disability Insurance . The beneficiaries are the retirees children of workers who died before retirement and the disabled . It is an attempt of the government to change the distribution of income that in turn affects the access to goods and services In the context of American , a payroll tax is a kind of income transfer- the working individual transfers their income to those who are not working anymore in the form of retirement benefits (Schiller , 1989 ,68-71 ground on the above statements , it can be stated that the intend of payroll taxation is highly beneficial- to support the needs of previous(a) age and other emergencies covered by these services . It overly ensures continues flow of money within an economy . However in American system of taxation , payroll taxation had turn a subject of much heated debates especially now that it has go away an economic burden to well-nigh American families . fit to Liu and et ,al ( 2005 ) payroll tax is already the largest tax paid by American families and there is an indication that the percent tax required by law will increase in the future . The biggest chunk in payroll taxation comes from the Social Security tax , which is currently requiring 7 .

51 from a worker s wage . Actually law requires 15 .3 but the other half is to be shouldered by the employers . If this tax and all other taxes on labor incomes are to be added , the Americans had to bear the 44 marginal tax rate . In other haggle , only 56 cents are being kept for all(prenominal) additional 1-dollar earned . In the year 2050 , when today s teenagers orbit retirement age , the marginal rate will lift to 53 (http /www .ncpa .org /pub /st /st252 . This is hard to swallow for low-income families where most dollars earned are spend in meeting radical needs . With tax reduction , the taxpayer s access to goods and services had become limited . The limitation imposed by less money to spare will produce a ripple effect of discontent , stress-related diseases and family crisis since taxpayer s had to spend a lot of time away from home to find other jobs to augment family income . He was vatic to be preparing for his old age but I wonderment if he does reach retirement age (62 or 65 ) under current circumstancesIn American micro economy , payroll...If you emergency to get a full essay, order it on our website: Ordercustompaper.com

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