This way the difference between an H1B and a real citizen employee is transparent to the employer, and the employee can move between companies without issue (or even take time off work, as long as they still pay)
Any excess money the employee has is either spent in driving up the local rental market, enriching landlords, or sent back to their home country. Minimizing rental competition is in the best interest of US citizens. Minimizing exporting money is in the best interest of the US government.
If it is paid by the employee, then companies would probably reimburse at least part of it. If it is paid by the company, it is already factored in the .salary amount. In the end, both employer and employee only care about the net amount the pay or get.
Now let’s say that the H1B, when he receives his $100k salary, goes and rents an apartment. He pays $2000/month for the apartment and lives in a nice luxury rental, and the apartment complex has one less available unit and charges $2100/month to future renters. The H1B is sending $30k/year back home. Instead, let’s say the H1B must also pay a $40k tax/year from their $100k salary. Now the H1B isn’t renting a luxury rental. They’re sharing a bedroom in a house, and sending $5k/year back home. The luxury rental stays on the market longer, and the next renter pays $1900/month, instead of $2000/month.
The key is that the H1Bs will take significantly lower than the “market” price which companies are being forced to pay. The companies are willing to pay significantly more than “market” price in order to displace their older workers. The claim for this system to work is that there aren’t enough US citizens to perform the work, and yet they’re laying off older US workers.