The incidence of a payroll tax
A)depends upon whether it is levied on the employer or employee.
B)is the same whether it is levied on the employer or the employee.
C)is more heavily on the employee as demand for labor becomes more elastic.
D)is more heavily on the employer as demand for labor becomes less elastic.

Question

Quizplus · Accepted Answer

The incidence of a payroll tax is determined by the relative elasticities of supply and demand for labor, not by whether it is levied on the employer or employee.

The Incidence of a Payroll Tax