"... because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped ... "
That actually says nothing about wages being part of that or not. It probably even excludes individual income taxes since it is the employee who bears these tax costs rather than the business. But the poster is fixated on the claim the reporter had that Jorgenson told him (the reporter) that prices can only fall this sharply if wages are cut. I doubt Jorgenson said that since he knows better and certainly realizes that most embedded taxes that could be removed from costs are in he business income tax part of the business rather than in employees gross wages which remain untouched.
Jorgenson, if anything, was probably telling the reporter (as he was telling Robbie earlier) that IN HIS MODEL wages declined by the amount of the income tax. That was true for the puropse of his simulation but means nothing "on the ground" in real life. Since a number of economists have made (and are no doubt still making) studies, it does not follow that any single one was relied upon for the assessment of the amount of embedded taxes to be removed. This is especially true since it is the reporter making the claim and not Jorgenson. Jorgenson, in fact, is very much in favor otf the benefits brought about by the FairTax.
It makes a convenient claim of opponents to misstate that, however and offer as "proof" an obviously biased reporter's article which is fairly hazy in precise meaning in several areas.