"phil_will1, if your theory and math are correct, then corporate income taxes would be a large percentage of prices. Guess what? In 2001 they were less than 2% of the FairTax base + exports ($189 billion in corporate income taxes). So there is obviously something wrong with either your theory or your math or both."
Other than the error that I corrected in the post above, the math seems to be working. On another thread, another poster questioned my assumption of 15% pre-tax profit margin, but in my experience that is what successful companies pull down.
I don't know where your numbers come from, so I can't really comment on that.
I don't think there is anything wrong with my math or theory, except that it's a hypothetical example for the purpose of demonstrating how taxes can cascade and produce a savings under the FairTax significantly greater than just the tax savings at the Retail level alone. The dynamics would be the same if it were applied to real rather than hypothetical values. If I am mistaken, I would be pleased for anyone to point out and explain to me my error.
However, you may be making a logical error in comparing my example to statistics of the FairTax base. The current corporate tax system is much much broader than the FairTax base. The cascading effect take place throughout the entire production tree up and including the FairTax base, not just in the FairTax base alone. A correct comparison would consider not only the direct tax savings on the FairTax base, but also the cascading effect of all the other industry as well.
I've stated what I believe what validate or invalidate "wages must come down" theory. I think the statistic you've presented neither validates nor invalidates the theory in question, unless I'm misunderstanding something, in which case, please explain my error. I'm not necessarily taking the position that you're wrong. I'm just trying to find a way to reasonably and confidently verify.