
Want Job Growth? Lower the Cost of Labor
As far as the “jobs, jobs, jobs” mantra, we can spend with borrowed money, which is not popular with voters, or we can look at what is right in front of our noses. To stop the hemorrhaging of jobs, the obvious thing for government to do is lower the cost of labor by cutting back on payroll taxes paid by employers and workers.
I plugged in data for an imaginary California worker making $45,000 a year who is single with no deductions and here is how it breaks out:
Gross pay (per month): $3,750 Federal income tax: $543 FICA (social security): $232.50 Medicare: $54.38
So already out of a gross pay of $3,750, this hypothetical Californian has over $829 taken out by the federal government before he gets a dime. But we need to add California’s payroll taxes.
California has four State payroll taxes which are administered by the Employment Development Department (EDD). They are Unemployment Insurance and Employment Training Tax, which are employer contributions, and State Disability Insurance (SDI) and Personal Income Tax… Read More