[Gabz]

To drop prices that much you would have to reduce wages by the amount of payroll/income taxes that the employees were previously paying, ie. take home pay stays the same.

Why...the employers other expenses will also drop, particularly in the cost of purchases to do business, including but not limited to dealing with tax code compliance.

[Your Nightmare]

Why...the employers other expenses will also drop, particularly in the cost of purchases to do business, including but not limited to dealing with tax code compliance.

You are assuming that these cost would be great enough for a 20% drop and you are assuming a business could have just added these costs to their prices. Prices aren't set by the business adding up all their costs plus whatever profit they want. Prices are set by the market equilibrium.

Do the math. The numbers don't add up.