I did include that, that's how I reduced the cost from $1.00 to $0.90 with the FairTax-- most of that was clearly stated as the employers portion of FICA. So that was covered.
You also seem to ignore all the supplies that Bob the Baker buys and the average of 15-20% embedded income and wage taxes in those.
For this part of Bob's cost I allowed that the his suppliers would be able to reduce their prices by the same 8% that I think Bob will be able to reduce his prices by. I did this by assuming that the FICA savings of 8% would be saved on his entire cost structure instead of just his labor costs, so I assumed that he would save 10% across the board-- labor, purchased supplies and overhead, and profit. So that was covered.
BTW. You business wouldn't have anything to do with Taxes, would it?
No, but I do have to pay them. I'm in sales, and I sell a non-financial service to other businesses.
And did you add the 15% on to Bob's take-home for his full portion of FICA?