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"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 know where your numbers come from, so I can't really comment on that.

Sorry, those were from 2003 and were my own calculations. Since I know you won't trust them, so let's use 2001 numbers.

I got the FairTax base from the American Farm Bureau analyis on FairTax.org. I added the exports from NIPA and divided the corporate income tax from Treasury's website by that sum.

FairTax Base:    $7,904 billion
Exports:       + $1,034 billion
===============================
TOTAL:           $8,937 billion

Corp Inc Tax:    $  151 billion


     151 / 8,937 = 1.69%

So, in 2001, the corporate income tax was only 1.69% of "prices." There is obviously something wrong with your model. Probably that you are assuming the business sets the price and can "embed" their taxes. Not too many businesses get to set their price, that is a function of market equilibrium.