Well, if you read carefully, you note that is NOT what I said. Let me make it a little clearer:
For after-tax prices to remain constant under the FairTax, the price of a product with embedded income taxes would have to decrease 23%.
YOU have claimed that all this (and more) can come from eliminating ONLY so-called "business taxes." You have stated countless times that these "business taxes" are only taxes on profits, and NOT employee wage or payroll taxes and NOT savings from compliance cost reductions.
Your overarching claim is that some fictitious cascading mechanism causes prices to rise far more than the actual tax collected.
Your claim is that prices will decline by some unknown amount, perhaps from 10% to 25% as you've reiterated here only by eliminating profit tax.
Now, if I've mis-stated any of these claims, I'm sure you'll point it out; but, if you do, please be clear about what you really mean.
As a sanity check, there is some simple math that can be done to check if your claims are reasonable:
What percentage of the retail sales price of a product must be accumulated profit in order for 23% of that retail price to be attributable to profit tax?For corporations, whose profits are taxed at 34.4%, the answer is 67% (sorry, I erred in typing 66%) :
if retail price(R) = cost(C) + profit(P),For non-corporate businesses, taxed at an average rate of 25%, the number is 92%:
then 34.4% of profit must = 23% of retail priceor
34.4% x P = 23% x R
Therefore, the ratio of profit to retail price (the % of price made up by accumulated profit)must be
P / R = 23 / 34.4 = .669 or 67%
if retail price(R) = cost(C) + profit(P),
then 25% of profit must = 23% of retail priceor
25% x P = 23% x R
Therefore, the ratio of profit to retail price (the % of price made up by accumulated profit)must be
P / R = 23 / 25 = .92 or 92%
Neither of those ratios comes close to the reality of embedded profit and therefore embedded tax.
Dimples you can sit argue specifics ALL DAY LONG what the bulk of embedded taxes come from. We have these BS arguments because because of your beloved hideous MARXIST Progressive tax code that punishes the successful and rewards the poor. Nevertheless, your argument is pointless because it will not make embedded taxes GO AWAY.
So are you for the status quo?
I certainly must have been misinformed since I thought that the statement:
"The potential price reduction of MOST products is FAR LESS than 23% FairTax added back at the end because cumulative profit is FAR less than the 66% of final sale price it would need ... to represent 23% of tax inclusive price. "
... actually meant that the 66% rate mentioned when you said 66% of price was a rate ... silly me!! It must have meant your pants size, eh? Then, too, later in your post in your (presumably) formulaic derivation you describe a number you give as 66% (OH PARDON ME ALL TO HELL! I MEANT 66.9%. GEE! GOSH! GOLLY I ERRED. A HUNDRED ZILLION PARDONS AND I HOPE YOU'RE NOT INSULTED DITTO OLD CHAP), but I note that you now call it a ratio. Is that now presumed to be different from a rate??
Before going further, BTW, I've not said that prices will drop 23% (or any other specific number) but just that they will drop a significant amount due to the embedded tax mechanism that you fail to understand despite many clear explanations - nor have you ever proven that to be an incorrect description ... you merely attempt to ignore it and falsely state other claims. Nor, in fact, have I ever said that embedded tax costs were composed of only the cascading embedded taxes you do not with to admit. In view of the fact that there are other costs that will be eliminated in addition to those on business income taxes - such as compliance costs, and a number of intangible costs related to misuse of assets caused by the income tax laws - it is quite clear that prices will be reduced by these other costs in addition the embedded business income tax costs.
In your arrogant and supercilious claim in #179, where you try to stake out the moral high ground that only you have not been insulting, calling names and denigrating others while (fortunately for you) always being the only one who is correct on all information you present whereas all of the other poor slobs are just fortunate to have you around to point out their almost-universal errors. That is NOT ONLY supercilious and arrogant - it is flatly incorrect since there have been several times on these threads your errors have been pointed out (only to have you ignore them, of course since you are, indeed, perfection). So stop your attempts to try to demean others in that fashion.
As for examples of your "wotrk" in that regard we have excerpts from recent threads:
SNIP*** ... Of course it's not a real world example you maroon! It's the MECHANISM that's important DON"T YOU GET THAT !!! tee hee, tee hee hee ... "... your inane example, which was profoundly incorrect ...
(and you don't even mention my name - tsk, tsk!)
... YOUR table: it's hogwash. You appear to be the one insisting on using selecive data (incorrectly at that) and bogus reasoning ... SNIP *** ... Believe what you want. You know, you're a rather comical person; I always get a chuckle of your replies ... SNIP *** ... Read my words carefully (understanding language is quite important to divining proper meaning.) ... SNIP *** ... you intimate that you are competent at the math. What's the problem? Cat got your calculator? ... SNIP *** ... You denigrate the ... SNIP ***
(USED TO START 4 CONSECUTIVE PARAGRAPHS FOLLOWED BY)
You don't actually offer any mathematical analysis, you just gush and claim I'm wrong.
(AND AT THE END OF POST)
SNIP *** ... Perhaps you don't understand that math: ... SNIP *** ... Please feel free to repost this anywhere you may encounter the infamous "cascading taxes" table posted by pigdog ... SNIP*** ... Dorothy was as convinced about the truth of Oz as you are of the fantasy of "cascading" taxes" ..." - It appears you've jumped into the deep end of the pool but clearly can't swim ...
And there are many more ... but I'd think you get the drift - the old saying about the glass houses, etc.
Now, back to your current claims. The examples of cascading, embedded income taxes I've given are neither "overarching" or "ficticious" and the explanations I've given are certainly understandable to most people. Your pretense that wages must be cut for prices to drop (or that prices must rise) does not comport with reality.
In the calculations you present, you continually allude to "accumulated profit" while I've pointed out to you before (more than once I believe) that there is no such thing as "accumulated profit" in the cascading example; there are cascading tax costs as a % of sell price but the profit is retained wihin the level where earned, not accumulated. For this reason neither example is meaningful since it relates to nothing real. In fact, take your calculation with the 34.4% tax rate - the amount that would be necessary to eual 23% of the sell price at Level 6 would be $66.44 x 0.23 = $15.28 which amount is clearly LESS than the 33.88% of embedded taxes which amount to $22.51. That would be assuming these would be real-world values which, BTW, was never claimed and which you continually try to put forth as an erroneous statement of what I have said.
The upshot of all this is that - ONCE AGAIN - it is "tax coses as % of sell price" that represent embedded taxes that are potentially removed (along with other costs) when the income tax is deep sixed. There are no accumulated profits and the pretense that there are is utter foolishnes.
Leaving that aside for the moment, why is it that we have never heard your proposed real tax plan as an alternative to the FairTax? And don't give us that nonsense about how if you could find out "just one more thing that were true" you'd love it. None of us on these threads are that gullible. Let's hear about how YOU believe the present system should be fixed with a real tax plan.