[Your Nightmare]

Are you including the share of SS that the employer contributes out of sight of the employee? So, an employees wage would be something like (net pay + tax = gross pay + employee matching (ss+tax match) = total wage)?

If so, I might better understand your wage decrease statement. If not, clearly I'm still confused.

I think (I could be wrong) most economists include the employer portion of the payroll tax in nominal wages because it is part of the "wage bargain" (I am going to pay you X for Y output). I believe they also include other benefits like insurance.

But whether they do or not does not affect the real wage (again, basically purchasing power). If the employer portion is in prices then it would have to be in the NRST rate so pre-tax prices may go down but after-tax prices would stay the same. No change in purchasing power (real wage stays the same). If the employer portion is paid by the employee through lower nominal wages and after the NRST nominal wages go up, the NRST makes after-tax prices go up also, so no increase in purchasing power.

Basically, you can't change real wages by changing where the tax is collected. The only opportunities for real wage changes with a revenue neutral fundamental tax reform is from compliance/administration costs and macroeconomic effects.

[CSM]

I don't have any data to argue with this post, nor do I have any motivation to argue with it. What I read (hear) you saying is that the after tax price is constant and real wages are constant (spending power). That leads me to believe that you're saying the net effect to the individual is that there is no change as a result of the method of revenue collection.

Assuming that is correct, I still would support the NRST over the current income tax system. Why wouldn't we want to bring the cost of government into the plain view of the citizens being governed? In my opinion, that would be the single biggest step towards spending reductions that could be taken.