One participant, who writes about technology, remarked that it is not unusual for tech firms to fire their employees and rehire them the next week as consultants. This is essentially a backdoor payroll tax reduction for the employer. When a worker is considered a contracter they become responsible for their full tax burden to Social Security and Medicare (and the cost of health and pension benefits).
So the total taxes paid to the government do not fall – just who ends up directly paying the government. Not to praise anything from the Heritage Foundation, but even Stephen Entin can explain the standard view with respect to who bears the incidence of the payroll tax:
The relatively elastic demand for labor, coupled with the assumption of a highly inelastic supply of labor, means that labor bears most of the initial economic incidence of taxes on labor income. It has become common to assert that all taxes on labor income fall on the worker, including the employers’ share of the pay¬roll tax, the employees’ share of the payroll tax, the unemployment compensation tax, and the portion of the income tax that falls on wages and salaries.
As the primary burden on the employer for paying this tax has been shifted to the worker, the standard model says that the wage rate being paid by the employer to the worker rises in an exactly offsetting fashion.