You are exactly right, someone has to pay for it. However, issolating the issue of low wage workers pushed into part time work with no benefits these taxes are based on wage level, not per capita fixed costs.
In the example previously stated, a 10% tax on wages for example (expanding FICA to cover yet another entitlement) would increase minimum COST 10%, but that is way more cost effective than a 37.5% increase illustrated above! It soaks the higher wage person at 10% instead of 7.5%, which would kill wage growth for a year or two if implemented over night.
You also provide less difference between part time and full time costs since ALL wages are taxed 10% the marginal cost of someone working 31 hours instead of 29 hours is not astronomical (note the 37.5% cost is over an entire 40 hours, the marginal cost of two hours more per week is $75/hour in this example - a 750% increase in marginal cost). Even spreading that cost over 10 hours is still a 150% increase in marginal cost of labor.
I think this is a horrible idea, I am just trying to illustrate the effects of a stance on employers. At the end of the day, a consumption tax to replace virtually all taxes (corporate, estate, income, FICA, etc) is optimal with a monthly pre-bate to all citizens, per capita. Tax consumption not production, it rewards savers and gives corporations a global competitive advantage. It also, in effect, lowers the minimum wage since companies no longer pay a 7.65% FICA tax.
