>And heaven forbid you should be so well off that you have to save for retirement with after-tax dollars and/or in taxable accounts!
Well, this is where the distortion comes in. The employer uses pre-tax money when funding pensions. The employee doesn't have the ability to do this. It's the same situation with other benefits.
So it's optimal to take a lower salary and more benefits. But this is strictly worse than if the taxation regime was the same for both employees and employers.
Well, this is where the distortion comes in. The employer uses pre-tax money when funding pensions. The employee doesn't have the ability to do this. It's the same situation with other benefits.
So it's optimal to take a lower salary and more benefits. But this is strictly worse than if the taxation regime was the same for both employees and employers.