The federal Insurance Contributions Act (FICA) tax is a payroll tax that finances Social Security and MEdicare. By law, employees each contribute 7.65% of the employees wages toward the programs. Note that the tax rate is 15.3% of wages and the tax payments are equally divided between employers and employees.
Would an economists say that the burden of the FICA tax is shared equally? Why or why not?
Who bears more of the tax burden? Workers or employers? Use supply and demand curves to illustrate your answer.
Please see the attached file.
Suppose the initial demand and supply of labor was D1 and S1. When the tax is imposed the effective wages received by the workers is Wage rate ...
The federal Insurance Contributions Act (FICA) tax is debated.