"What do you say I'm paying?"
How can I be clearer. You are paying income taxes, whatever they are called. If you aren't paying taxes on the income you receive, in whatever form you receive it, you are cheating the government.
"So, it evens out. He gets to keep his personal income and payroll taxes, and with that, he pays the NSRT."
George knows exactly what he pays (and has control over what taxes he pays) under a NST. Sounds like a good trade.
"Okay, what about Bob? Bob makes $50K from his bakery, and pays $9K in personal income and payroll taxes. So, he takes home $41K. If he has to lower his prices by the amount of his taxes, he still takes home $41K"
No he doesn't because he IS NOT paying personal income and payroll taxes on his business. He makes $50,000 not $41,000. There will be NO income tax or payroll tax.
The rest of your argument is based on these incorrect assumptions
Dear woodbeez,
"No he doesn't because he IS NOT paying personal income and payroll taxes on his business. He makes $50,000 not $41,000. There will be NO income tax or payroll tax."
Good! Then Bob's in good shape, here.
But that means that under the current system, he's paying no corporate income taxes. And that means, his business won't be getting them back, because he's not paying them in the first place. And that means that for Bob's business, prices can't be lowered from the corporate income taxes he is no longer paying. Because he wasn't paying them in the first place.
If you do a little spreadsheet showing cascaded taxes, when you get to Bob's level, the amount of taxation he adds to the final product that would be removed by the NSRT is 0%.
sitetest