As a result of an increase in the payroll tax that employers must pay on their employeesʹ wages, employers reduce the starting wage for new employees. This is an example of

A) tax shifting.
B) tax incidence.
C) a regressive tax.
D) tax avoidance.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.

Tax Shifting

The process by which the economic burden of a tax is passed from one party to another.

Starting Wage

The initial salary offered to an employee by an employer when they begin a new job.