Behind every great man is a great accountant. Louis XIV was able to become the most extravagant ruler the French have ever had – obviously against very stiff competition – because he employed the brilliant Jean-Baptiste Colbert as his Minister of Finance.

It was Colbert who said that taxation was like plucking a goose: you want to end up with the maximum amount of feathers for the minimum amount of hissing.

Politicians and bureaucrats have followed this dictum ever since – all too often jumping to the wrong conclusion that it meant killing the poor goose.

Colbert would have loved payroll taxes – or “employers’ national insurance contributions” to use the British euphemism. They are, in every respect, income taxes, but, since the employee is not the one who signs the cheques, he is unaware of how much is being taken. Employers know, because we do sign the cheques, but who cares what we say? What matters is that there are fewer employers than employees, so there is less hissing.

Yet there is still a price to be paid. There always is. Increased costs of employment have exactly the same economic effect whether they come in the form of salary or payroll tax: some posts become unviable.

In calculating whether a post is viable, an employer has to factor in much more than the salary. There are usually payroll taxes, and possibly compulsory pension contributions, health benefits, and pension funds as well. Then there are the costs of recruitment, selection, training, health and safety, insurance, maternity – and now paternity – leave, and additional administration and supervision, as well as the possible costs of redundancy and litigation. This is to say nothing of providing a desk and computer, or other workplace essentials, once said employee actually starts doing some work.

One recent article implies that the true cost of each employee in the USA is 140% of his salary. This is almost certainly an under-estimate. Wise management consultants should work on the basis of a rule of thumb of 150%.