There is no evidence to support this claim. Why would wages have to decrease after taxes on businesses, that are passed on to consumers ANYWAY are eliminated. What justification would also require wages to decrease?
Because the taxes currently in the wages are also passed on to the consumer. If these taxes go in the pocket of the employee, the added sales tax will increase the price of goods. Employees will have more money to spend, but prices for everything goes up. The only way to keep prices level would be for employees to take a pay cut in the amount of federal taxes they currently pay. There is no free ride simply by shuffling how taxes get paid.
What justification would also require wages to decrease?Actually it would be the withholding. The employee's withholding would have to be retained by the employer to achieve the 20% + price reduction...That means no 100% paychecks.
The justification is simple business logic and grade school math.