i dont understand the proposal to tax the employee.

Taxing an activity makes it happen less. If the gov't want fewer railroad workers (or in your hypothetical example, mining equipment operators), they'd tax them like this! there'd be fewer operators as a result, and any shortage of them will cause problems. These operators aren't slaves - they can quit the industry.

The gov't would instead tax those employees _less_, in order for them to keep more of their wages, and thus encourage more of them to exist.