If I understand correctly, employers pay a payroll tax based on how much they pay us. This is not at all connected to the witholding of taxes from our paycheck. It is an additional tax. If the payrol tax is eliminated as part of the fair tax plan, the employer would indeed see a cost reduction while still allowing us to keep money that is taxed from our wages.
I don't know if the fair tax plan intends to eliminate payroll taxes.
Shalom.
The payroll tax employers pay is entirely based on what they withold from your check. The employer also much match your FICA taxes.
I don't know if the fair tax plan intends to eliminate payroll taxes.
It eliminates all federal payroll taxes as well as income and gift/estate taxes.