In order for prices to stay about the same, Dr. Jorgenson assumed ALL taxes would have to come out of the price of goods, which includes the taxes paid by employees. Now there is no mechanism to make that actually happen, so employees will keep all their paycheck. The downside is that according to their expert, prices will go up substantially after the sales tax is added. Prices can not stay the same under that scenerio.So Jorgenson is saying if employees keep all of their gross paycheck, they would see a substantial increase in prices because employers wouldn't see any savings . Following his reasoning, the increase in take home pay would offset the increase in prices.
Following his reasoning, the increase in take home pay would offset the increase in prices.In a perfect world where everybody pays and there are no phoney rebates.