You make the exact same amount of money and your employer reduces his price by the money saved on his gross employee costs (not net take home pay) and his income tax costs(assuming no other savings). If you believe in the power of capitalism, his prices drop by that amount. His bottom line and your take home pay remain exactly the same
I'm sure no one will be upset when they learn their hourly rate is being reduced...If now, under the current income tax system, you got an increase in your hourly wage but saw your withholdings increase by more than you earned from the hourly wage increase, is that a pay raise or a pay cut? How does that fit into your equation?
His bottom line and your take home pay remain exactly the same
Presently, when someone uses the term "take home pay" it means after taxes have been deducted. The take home pay AMOUNT might "remain exactly the same" but the AMOUNT is BEFORE tax, not after tax. In addition to what your employer ripped you off for your new take home value would be reduced 23%...That's a double whammy!
As to reduced prices. Most all products are produced in foreign countries or the materials for their production are. THEIR prices (as in MOST prices) won't be changed by YOUR reduced wage. That's a loss to the consumer/employee.
If now, under the current income tax system, you got an increase in your hourly wage but saw your withholdings increase by more than you earned from the hourly wage increase, is that a pay raise or a pay cut? How does that fit into your equation?Is the discussion income taxes or a hypothetical sales tax? "The current system" actually exists, the sales tax is hypothetical, wishful thinking, lies and conjecture. If you have a real life example, (not one you made up) of your what if, you can post it and we'll discuss it...