You're apparently unaware that not all tax appears on your salary receipt. Employers have to pay 20% to SS, on top of the 11% that the employee pays. (This amount doesn't count toward your gross income for IRS purposes though, which is relevant to your point)

The distinction is largely a technicality, all the more because both parts of the SS contribution are paid by the employer directly to the state, but it does have one effect: because the 20% don't show up in the salary receipt, most portuguese people are, like you, blissfully unaware of what the real tax rate on their salaries is.

If companies all of the sudden didn't have to paid those 20% would I see that reflected on my paycheck? I bet you I wouldn't nor anyone else.

I've heard that falacy time and time again: "Oh, if I didn't have to pay so much taxes for each worker I could pay higher salaries."

You're responding to a statement I didn't make. I just corrected the common misconception that the SS tax is 11%, it's not, it's 34.75% [0]

What would happen if those taxes were lowered is for economists to speculate, I'm not one (even then, as the joke goes, put a question to two economists, get three different opinions)

[0] This conversation made go check the exact values, you can find them here: http://www.economias.pt/contribuicoes-para-a-seguranca-socia...