14. Who pays texes?Indirect payment Let's say you're a worker and your potential employer has to pay amounts matching how much you pay to FICA (Medicare and Social Socurity) as well as pay state and federal unemployment tax. Now, you may think this doesn't affect you because you're employer is paying this not you. BUT... that money your employer has to pay calculates into whether he hires you That money is part of the total cost of your hire. If he judges that the costs of hiring you outweigh the possible benefits (or, with those costs being too high), they just won't hire you. The cost of having you as an employee isn't simply your wage, it's also the taxes the business of having you. This acts as an Indirect cost to you. 15. Who pays taxes?Indirect payment Let's say you/re a shareholder in a company (you own some stock). You get pald a dividend for the stock you own when the company makes a profit. The bigeer the profit, the bigger the dividend. The amount the company has to pay in income tax from its profit is profit that isn't paid out to you as dividends. You lose out on money and it can act as a disincentive for you to invest in the company or to invest more. Instesd you'll invest your money somewhere where you'll make more money (You'll also get taxed on the dividend you receive since it counts an unearned income.) 16. Who pays taxes?ndirectparment The really indirect cost to you is in opportunity cost . tradeoffs. A company can make a decision between competing uses of its money. Let's say paying taxes or hiring more employees. It's not much a choice because the company must pay its taxes. So the opportunity cost of paying taxes is hiring employees It may also be making Improvements on its capital Ordoling research and cevelopment on new products or

Question

14. Who pays texes?Indirect payment Let's say you're a worker and your potential employer has to pay amounts matching how much you pay to FICA (Medicare and Social Socurity) as well as pay state and federal unemployment tax. Now, you may think this doesn't affect you because you're employer is paying this not you. BUT... that money your employer has to pay calculates into whether he hires you That money is part of the total cost of your hire. If he judges that the costs of hiring you outweigh the possible benefits (or, with those costs being too high), they just won't hire you. The cost of having you as an employee isn't simply your wage, it's also the taxes the business of having you. This acts as an Indirect cost to you. 15. Who pays taxes?Indirect payment Let's say you/re a shareholder in a company (you own some stock). You get pald a dividend for the stock you own when the company makes a profit. The bigeer the profit, the bigger the dividend. The amount the company has to pay in income tax from its profit is profit that isn't paid out to you as dividends. You lose out on money and it can act as a disincentive for you to invest in the company or to invest more. Instesd you'll invest your money somewhere where you'll make more money (You'll also get taxed on the dividend you receive since it counts an unearned income.) 16. Who pays taxes?ndirectparment The really indirect cost to you is in opportunity cost . tradeoffs. A company can make a decision between competing uses of its money. Let's say paying taxes or hiring more employees. It's not much a choice because the company must pay its taxes. So the opportunity cost of paying taxes is hiring employees It may also be making Improvements on its capital Ordoling research and cevelopment on new products or

Answer 1

14. The worker indirectly pays taxes through their employer.15. The shareholder indirectly pays taxes through the company's income tax on its profit.16. The company indirectly pays taxes through the opportunity cost of paying taxes versus other financial decisions.

Answer 2

## Step 1The problem presents three different scenarios where taxes are paid indirectly. In each case, the individual or entity is not directly paying the taxes, but the cost of the taxes is factored into other financial decisions.## Step 2In the first scenario, a worker is not directly paying taxes, but the potential employer has to pay amounts matching how much the worker pays to FICA (Medicare and Social Security) as well as pay state and federal unemployment tax. This cost is factored into the total cost of hiring the worker.## Step 3In the second scenario, a shareholder in a company is not directly paying taxes, but the company has to pay income tax from its profit. This cost is factored into the dividend paid to the shareholder.## Step 4In the third scenario, a company directly paying taxes, but the cost of paying taxes is factored into the decision to hire more employees or make improvements on its capital.

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