LEVEL 1 2 3 4 5 6 INPUTS $1.00 $1.41 $2.00 $2.82 $3.98 $5.62 33% PROFIT MARGIN $0.33 $0.47 $0.66 $0.93 $1.31 $1.85 25% TAX COSTS $0.08 $0.12 $0.17 $0.23 $0.33 $0.46 SELL PRICE $1.41 $1.99 $2.83 $3.98 $5.62 $7.94 Accumulated inputs $1.00 $2.41 $4.41 $7.23 $11.21 $16.83 inputs as % of sell price 70.80% 121.01% 156.11% 181.51% 199.40% 212.01% Accumulated profits $0.33 $0.80 $1.46 $2.39 $3.70 $5.55 profits as % of sell price 23.36% 39.93% 51.52% 59.90% 65.80% 69.96% Accumulated tax costs $0.08 $0.20 $0.36 $0.60 $0.92 $1.39 Tax costs as % of sell price 5.84% 9.98% 12.90% 14.98% 16.44% 17.48%
As you can see, profits end up being 69.96% of the final price and inputs end up being 212%! This shows the obvious flaw in your logic. If you are going to use accumulated costs, you need to use accumulated prices (notice how in your example the accumulated taxes are still 25% of the accumulated profits - there is no cascading).
Lets look at a corrected example using accumulated numbers across the board.
LEVEL 1 2 3 4 5 6 INPUTS $1.00 $1.41 $2.00 $2.82 $3.98 $5.62 33% PROFIT MARGIN $0.33 $0.47 $0.66 $0.93 $1.31 $1.85 25% TAX COSTS $0.08 $0.12 $0.17 $0.23 $0.33 $0.46 SELL PRICE $1.41 $1.99 $2.83 $3.98 $5.62 $7.94 Accumulated sales $ $1.41 $3.40 $6.23 $10.21 $15.83 $23.77 Accumulated inputs $1.00 $2.41 $4.41 $7.23 $11.21 $16.83 inputs as % of accumulated sales 70.80% 70.80% 70.80% 70.80% 70.80% 70.80% Accumulated profits $0.33 $0.80 $1.46 $2.39 $3.70 $5.55 profits as % of accumulated sales 23.36% 23.36% 23.36% 23.36% 23.36% 23.36% Accumulated tax costs $0.08 $0.20 $0.36 $0.60 $0.92 $1.39 Tax costs as % of accumulated sales 5.66% 5.88% 5.78% 5.88% 5.81% 5.85%
As you can see, the tax costs do not cascade (there is a slight difference from level to level due to rounding).
Talk about distorted examples!! This one ranks right up here at the top. Nightie, I've got to hand it to you, you've invented a whole new branch of accounting from what most people are used to ... let's call it "Creative Accounting", eh?? That's certainly what it is.
There are any number of things at odds with the real world or with the example of tax cascading given in #154. Overall, basically what you attempt is to smash all of the numbers for the individual businesses together to make them into a single company and of course by that definition the tax rate will never cascade nore go above 25% - but that is the number given by definition in the example for each business. When you re-define the business to be a single one as you attempt to do by consolidating their numbers you have only a single business and a 25% tax limit. DUH!!
These are individual busineses and your use of "accumulated inputs" is merely a way of multiple counting and is, therefore, meaningless. As the sell price from #1 is passed to #2 it already IS the equivalent of what you attempt to redefe it as by "accumulated inputs" (which is merely a method of your overstating the inputs by a significant amount for a given business). Since that's true, your "inputs as % of sell price" is also meaningkless since it stems from a meanginless base.
Your "accumulated profits" suffers from a very similar fatal problem as it is also the result of mashing all of the businesses together and looking at them as though they were a single business. They aren't - each is a separate business and must be considered as such. Done your way, of course, and for a similar reason as the meaningless figures in the paragraph just above there can be no tax cascading since you have now mashed the different busineses into a single one and therefore - voila - NO CASCADING in your little Creative Accounting dream world.
Sorry, Nightie - won't fly. I'll leave it up to any of the real CPS's that are FairTax supporters to discuss it further with you if they wish, but I certainly won't waste any more time looking at "stuff" like that. I think you've hung around Looey too long. Much prettier than the chart I posted in #154, though.
Tax cascading is shown by the example in #154 - except for all those who must deny it or be wrong.