A recent editorial advocated a cut in the payroll tax, with the argument that such a tax cut would “stimulate employment, since employers shoulder…

A recent editorial advocated a cut in the payroll tax, with the argument that such a tax cut would “stimulate employment, since employers shoulder half the burden of the tax.” Use a graph to illustrate circumstances under which this would and would not be true.

The proportion in which tax burden is shared between the buyers and the suppliers of acommodity depends on the relative elasticities of their demand and supply. Thus, in the labourmarket, it is…