The primary purpose of payroll taxes is to pay for specific social programs. Payroll taxes typically fund programs such as Social Security and Medicare in the United States. These taxes are collected from workers' paychecks and are used to provide support and benefits for retired individuals, disabled individuals, and various healthcare needs. Additionally, payroll taxes also provide government revenues, but their main focus is on funding those specific social programs.
While payroll taxes can have various economic impacts, such as potentially influencing purchasing power, their designed purpose is to ensure the sustainability of essential social safety nets.
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