Medicare payroll is a
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Social insurance revenues come from .
A. Primarily; Social Security payroll taxes.
b. Primarily, Medicare taxes.
c. Primarily; Social Security payroll taxes and Medicare taxes.
d. Do not; Social Security payroll taxes.
A number of empirical studies suggest that labor demand is elastic while labor supply is very inelastic. Assume too that payroll taxes (SS plus Medicare) are 15.3 percent and legislated to be paid half by the employees and half by the employer.
a) What would happen to worker wages if payroll taxes were eliminated?
b) What would happen to employment costs paid by firms if payroll taxes were eliminated?
c) What would happen to producer and worker surplus if payroll taxes were eliminated? Which measure is relatively more sensitive to payroll taxes? Why?
d) Why might workers not want payroll taxes eliminated?
Why do social security and medicare pose problems for the federal government budget?
A. The worker-to-retiree ratio is increasing.B. The number of sick people is rising too quickly.C. Payroll taxes are capped and cannot be raised.D. The number of retirees is decreasing.E. The life expectancy of retirees is increasing.