How do you figure that? As I understand it, the over all average of embedded taxes is going to approach the average tax rate for income, adjusted down a little by the payroll tax. The reason being is the profit portion, is taxed at the corporate tax rate. The payroll is obviously taxed at the payroll rate... but the thing that's easy to miss, is that the rest of the expenses are the sum of companies with similar breakdowns. Prices they are charged by everyone they pay out to, which would all have a similar breakdown in tax base. So even if a company's margin is very low, his expenses should have the same amount of tax burden as the average tax burden of all companies.
I would like anyone who understnds this better than me correct me if I am mistaken. But I believe that the amount of cumulative tax paid along the entire tree of production, would tend to approach the average income tax rate, adjusted down a little by the payroll rate.
How do you figure that? As I understand it, the over all average of embedded taxes is going to approach the average tax rate for income, adjusted down a little by the payroll tax.But the total embedded taxes can't equal more than the taxes collected. I used the total corporate income taxes collected from all sources and divided it just by the FairTax base + exports. If I had divided it by the larger base the percentage would have been lower.
This is where I'm having a problem and I admit that YN's latest data tend to support him. You can't have more embedded taxes than there are taxes paid.