Oh, you were talking about the employer portion of payroll taxes where I was focused on the employee portion of payroll taxes.
(Cutting the employee portion does put more money in the hands of consumers)
Systemic high unemployment and underemployment is a self-propelling snowball.
More unemployed people leads to fewer sales in the economy which leads to a lessor demand for employees, etc etc.
Higher sales would lead to more employment which will lead to higher sales.
Then getting over the hurdle of payroll costs isn't the same issue and is just a usual cost of doing business.
But say we reduce or eliminate employer payroll costs.
The windfall to business could be split a couple ways.
Some could go to raises or more hiring and some will go to higher taxable income.
The higher taxable income helps replace some of the taxes and the greater employment would lead to less of a need for government unemployment costs, or a lessor need for taxes maybe.
Would this be enough to generate the same taxable revenue for social security?
Unwinding and restructuring all of this is an impossible task.
And the current system works pretty well when things are good.
A successful and well run business doesn't have issues covering payroll costs and benefits.
They just feel pressure to get returns, to make high profits.
They squeeze their employees not to cover payroll costs but to increase the bottom line.
My fear is that if you take away employer payroll costs, the more successful companies will just put it in their pockets and not change their pay or hiring one bit.
Struggling businesses may use it for their employees.
But they don't have the lobbying money to affect laws to benefit them and not big businesses.