Lets not confuse the issue, an item that costs $100 costs $100 in current income. Lets change that to units of labor. If I'm willing to pay 10 units of $10 per hour labor for something now. I'm likely willing to pay 10 units of labor, and unlikely to pay 11 units - at whatever compensation rubber-ruler unit at some other time. So the $100 needs adjustment in terms of economic unit expended effort, not in terms of the rubber-ruler units you propose.
Prices are established in terms of the economic unit's efforts to obtain their (or its) desires, not in terms of your rubber units of dollars or euros or rupee or pesos. Give me, and economic unit, or others in a like situation 10x the dollars, and all prices or all desireable goods will gravitate quickly to 10x the rubber-rulered price. But now if my desire is burdened with a 30% tax. Well, if I'm paid 30% more, who cares. But I'm not, I'm paid maybe 15-25% more, about the effective tax rate of the middle class. So I cannot/will not buy. Economy screwed - right?
not in terms of the rubber-ruler units you propose.LOL!
You are absolutely wrong. This is the basis of your misunderstanding.
An item with a price tag of $100 costs MORE than $100 of earnings. Precisely, it costs your effective federal tax rate more.
Again....
If I earn $100 in income, I only keep $75 of it. Guess what? That isn't enough to buy the $100 item.
In order to buy the $100 item, I'd need to earn income of $133. That would leave $100 after tax.
You are actually saying that the nrst casues a reduction in purchasing power but that the income tax doesn't!
Ever look around and see you're the only one saying this? You need to learn quickly that any tax reduces purchasing power.
The reduction in purchasing power is the effective rate of tax.
OY!