With companies cutting production, trimming payrolls and scaling back investment plans, profits should improve by next spring, according to ING Barings Securities, whose research shows that stock prices, on average, rally five months before business conditions improve.
Thus, not only are Social Security payroll taxes not scaled as income increases, they stop completely beyond a given level, making them quite regressive.
In a difficult economy, flexible work arrangements are a triple win, allowing organizations to cut payroll costs without large-scale staff reductions, boost employee morale and retain top talent so the firm can quickly gear up for new business when the economy turns around.
That is to say, these profits are aided by the barely dampened American appetite for goods combined with a drastically scaled back payroll.
BPOs, by using low-cost labour and standardising tedious business functions like payroll, created large economies of scale that made it more cost effective for companies to buy this service than do it themselves.
High-powered databases, which scale mountains of payroll, inventory and other data, are the Ferraris of software: complex, pricey and a world apart from Microsoft's PC products.
"The sheer scale of off-payroll engagements across government, and the length and size of these contracts, suggests that the scope for artificial tax minimisation may be greater than previously understood," he wrote.
As companies like ZenPayroll, Zenefits and Zoho (they don't all begin with Z) continue to grow their businesses and try to disrupt Intuit, scaling up its payroll operations, and adding more international and cloud components, are essential for Intuit to remain competitive.
A great many Americans at the lower end of the economic scale who pay sizable payroll taxes for Social Security and Medicare will not be getting the rebate in any case.
