The Tax Wedge: one for the archive

I started this blog to keep a - well - log of thoughts and my reactions to events with an eye to eliminating hindsight bias from a future book-length publication. For that reason sometimes I simply link to a particularly good article with a brief summary to remind me why I did it. A prime example is "The Tax Wedge" on today's ASI, a really useful bit of analysis of what exactly we mean when we refer to a tax on labour.

• Someone with a salary of £25,000 will cost their employer £27,474. The employee will only receive £19,362 of that.                30 percent of the total cost of employing them goes directly to the government.
• Someone with a salary of £50,000 will cost their employer £55,924. The employee will only receive £35,611 of that.                36 percent of the total cost of employing them goes directly to the government.
• Someone with a salary of £75,000 will cost their employer £84,374. The employee will only receive £50,111 of that.                41 percent of the total cost of employing them goes directly to the government.
• Someone with a salary of £100,000 will cost their employer £112,824. The employee will only receive £64,611 of that.               48 percent of the total cost of employing them goes directly to the government.

QED. Furthermore, the money removed from the wallets of those who earn it goes to pay for a host of parasites and parasitic "investment" that contribute nothing to productivity or general welfare.