When the government imposes a payroll tax on employers (and not on workers), which of the following effects will not come about?

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Quizplus · Accepted Answer

A payroll tax on employers, even though initially imposed on them, affects both employers and employees. The labor demand curve shifts down because the cost of hiring workers increases, leading to a decrease in employment. Both firms and workers end up bearing a portion of the tax burden through lower wages or reduced profits. However, real wages will not remain fixed in a competitive labor market; they are likely to decrease as the tax burden is shared between employers and employees.

When the Government Imposes a Payroll Tax on Employers (And