Excess burden of taxation. Efficiency loss ratio. Charges for government goods or services. Public enterprises such as lotteries. If the market supply of labor services is perfectly inelastic, a tax on labor income will reduce the net wages received by workers by the full amount of the tax per labor hour.
Workers work the same amount regardless of wages.
So now they will work the same. The supply is vertical. The demand is inclined. The vertical difference implied by the tax now ocurrs at the same quantity as before. This payroll tax is therefore a regressive tax.