[Your Nightmare]

Hence the view some economists have that wages would have to drop if prices drop.

There is also the employer share of the payroll tax. Virtually every economist believes this is borne by labor through lower wages, but if we assume for the sake of discussion that they in prices:

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

Corp Inc Tax:       $  151 billion
Corp Payroll Tax:   $  253 billion
==================================
TOTAL               $  403 billion


     403 / 8,937 = 4.5%

4.5% of "prices." Still not looking good for the cascading, embedded corporate tax theory, is it?

[CSM]

"There is also the employer share of the payroll tax. Virtually every economist believes this is borne by labor through lower wages,..."

Maybe I'm missing something, but if labor bears the payroll tax with lower wages, how does removing the payroll tax drive a wage decrease?