[Always Right]

but gross pay is not gross outlay to an employer.

That is not the point. The point is how does the employer realize the $1.3 Trillion worth savings from the taxes the employee now pays. Without the employer seeing those savings, the employer can not significantly reduce his prices.

[chronic_loser]

20% is an overstatement. However, 7.5% is not, and that is a HUGE savings for an employer. Plus, when you add in maybe 2-3 per cent for the accountant/bookeeper/tax professional fees (not an unreasonable assumption, based on my own history), you have a 10 per cent net savings (from payroll) to the business owner.

Like I said, I don't know about this particuar plan. If they are saying that the business owner gets a windfall of 20% because he doesn't have to withold taxes, then that is just silly. However, there certainly WOULD BE savings if we went to a tax system where I am not forced to be the collection agent for the fed, as a small business owner.

[Bigun]

Without the employer seeing those savings, the employer can not significantly reduce his prices.

Why do you persist in trying to make the spurious argument that the only costs imposed by the income tax system are the taxes themselves when you KNOW that to be untrue?

"All goods and services produced in the United States already contain the embedded costs of the current tax system in their prices." is a far cry from embedded taxes only!