[hussong]

In Germany, the employer's contribution to social security is tax-free for the employee and is a fully deductible cost for the employer.

Other benefits (company car, apartment, fuel etc.) are subject to employee's income tax beyond a certain threshold.

Edit: Taking a step back, there is simply a fundamental difference between taxes and payments to social security / different insurances.

[mikeash]

Taxes are tax deductible? True, but pointless.

I think the "fundamental difference" is key. I don't ultimately see any real difference between taking 12.4% of my pay (under $118,500) for Social Security, and taking a variable percentage of my pay for government operations in general. It's money, based on a percentage of what I earn, that goes to the government, i.e. an income tax.