That came from one of the Squirrels Nightie - he claimed it was the One True Way to calculate embedded costs.
I'd be glad to look at any explanation you might have - but in the meantime, tell us about your Nightmare Tax plans; haven't seen a single book written to describe the benefits of that - and I searched for (but did not find) "The Nightmare Tax Book".
Guess it hasn't made it (quite) to the top of the charts yet, eh?
As you've never been able to fully grasp, the algorithm presented in the cited example is the proper way to calculate such costs. One needs to remember that example was created in response to your inane example, which was profoundly incorrect.
AND, as usual, you have taken the example COMPLETELY out of context by leaving out several explanations AND other examples; most notably:
The bottoms up method you have been shopping around is highly misleading (perhaps intentionally so)The NUMBERS do matter: number of levels, amount of profit, tax rate, etc ... 33% profit at every level is YOUR number, and quite ridiculously high!
The potential price reduction of MOST products is FAR LESS than 23% FairTax added back at the end because cumulative profit is FAR less than the 66% of final sale price it would need to be for accumulated, embedded, cascaded, or whatever you wanna callit tax to represent 23% of tax inclusive price.
Ultimately, I notice one characteristic of ALL your responses to ANY analytic post that questions the veracity of the claims of the FairTax: Make up a phoney example (or take someone else's out of context), avoid any real numeric analysis of your own, call your opponent names, close your eyes, click your heals and repeat three times:
"Prices will go down!, Prices will go down! Prices will go down ..."
Then for good measure add:
"AND you can keep ALL your gross pay TOO!"
Dorothy was as convinced about the truth of Oz as you are of the fantasy of "cascading" taxes. The embedded profit taxes in prices represent far less than you keep claiming ... and even you admit that "Whether it might be 10, 15, 20, 25% - or perhaps more - is not yet known." In reality, the number is more like 2% to 5%. AND for companies like airlines and auto manufacturers, the number is more like ZERO.