The "prebate" does not affect prices. The prebate lowers the net tax receipts to the gov't thereby causing the "revenue neutral" tax rate to be higher than it would otherwise be. In other words, if there was no "prebate" the sales tax (inclusive) rate would be less than 23%.
It's not a "freebie." Everyone who pay cumulative sales tax in excess of the "prebate" amount pays for everyone who pays cumulative sales tax in amounts less than the "prebate." It's a form of income redistribution or progressivity.
And even if prices go up some, what affect does no SS FICA income tax have on net cost?
Depend on what assumption you choose: If employees get to keep their current gross wages, then prices cannot fall by as much as claimed; after-tax prices will rise considerably. If employees forfeit the income and FICA tax portion of their wages (and keep the same take-home pay) prices can decline more significantly ... if business pass along the forfeiture in the form of lower prices; some will, some won't. After tax prices in that scenario may only rise a small amount. Some claim they will fall a bit, but that debate remains unresolved.
It is clear that unless you believe that NO income tax becomes embedded in prices that the removal of the business income taxes will cause prices to decline. Removing a cost element is going to cause prices to increase or remain the same ... how?