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Payroll-expense (and 'jumpstart') forecasts shaped by stock-price outlook and layoffs
Summary
Staff told the council payroll-expense tax projections were affected by both announced layoffs (pressuring employment) and stronger stock-price outlooks (supporting compensation-driven tax bases), producing a mixed revision across 2026'28.
Forecast staff said the payroll-expense tax outlook reflects two competing forces: layoffs in the tech sector that reduce employment and an improved outlook for stock prices that raises expected compensation and therefore tax liabilities. "The main driver for the revision here is the change in the outlook for stock prices," Jan Duras said, explaining why payroll-expense projections rose in some years even as employment declines.
Duras noted that payroll-expense (and related supplemental taxes on high compensation) are concentrated in a small set of taxpayers, which increases volatility: "Top 10 taxpayers pay about 0.667 of the overall tax. Top 50, about 90%." Forecast staff cautioned that quarterly payments are poor signals of annual obligations and that the forecast remains uncertain when large employers announce workforce changes.
