We have modeled an employee compensation event and noticed that the direct tax results are $0. We expected that there would be some direct payroll and personal tax associated with giving employees extra money.
If we model $1M in employee compensation, and said that for direct effects, 25% of that $1M would be taxed at the federal income tax level, would that double count the tax impacts. In other words, do the induced/indirect results already account for the direct personal and payroll taxes?
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