tax wedge

tax wedge definition - business

tax wedge

The tax-related difference between the cost to employ a worker and the worker's take-home pay. Social Security taxes and income tax withholding reduce workers' paychecks below the workers' cost to the employer.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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