Final answer:
A payroll tax includes Social Security and Medicare taxes paid by employers. This tax type funds federal programs and is proportional for Medicare and can be regressive for Social Security for high income earners.
Step-by-step explanation:
The type of tax that includes Social Security and Medicare taxes paid by an employer is best classified as a payroll tax. Payroll taxes are used to fund federal programs such as Social Security and Medicare and are a significant part of federal revenues. Unlike a progressive tax like the federal income tax where higher income earners pay a larger share of their income, the Medicare payroll tax is a proportional tax, meaning it is a flat percentage of all wages earned. However, the Social Security payroll tax becomes regressive above a certain threshold, as higher income earners pay a smaller share of their income in tax compared to lower income earners.