Are you really that ignorant?
Don’t you know there are two parts of Social Security withholding, one for the employee and a matching part by the employer?
When a wage earner gets paid does he see his employer’s matching FICA contribution withheld on the paystub? No.
If the employer does not withhold the employee’s FICA contribution, and all other payroll and income taxes, does the employee not see the entire gross income?
And what of the employer’s matching contribution?
You don’t understand the basics of taxation and yet you post like you know something. Just another hot air know-nothing know-it-all.
And you are adding wrong because it is not just the employer’s payroll and tax savings that are used to reduce costs, it is also the employer’s suppliers and contractors that pass on their savings as well. Business to business transactions are not subject to the NRST. And the cost reductions up and down the entire supply chain, 10-30% from each supplier and contractor add up to reduce costs. You forgot those suppliers and contractors because of your simpleton model. You don’t have the data on the supply chain and you haven’t done an analysis because you have no data. Yet you argue without facts and data. What bravado!
Simple example:
Supplier A —> 18% cost reduction —> Supplier B —> 14% cost reduction
Contractor 1 —> 12% cost reduction —> Supplier B —>11% cost reduction
etc.
——> Retailer
and so on. The analysis of federal embedded taxes and cost savings involves modeling the supply chain across broad retail product categories. Your simpleton model gets an F.
But of course you did not mention these things. You are so busy acting like a know-it-all that you failed to learn anything to know.
Hey! You're the one who said, "You think the builder cannot return the employee’s FICA contribution to the employer and retain the employer’s FICA contribution to lower costs?"
NOW you're saying the employee keeps his portion of FICA and the employer retains only his part. Would you please make up you mind?
In this new scenario, yes, the employee takes home his gross paycheck.
But now the employer only has his portion of FICA to reduce costs (6.2%) plus his portion of Medicare (1.45%) plus compliance costs of 1-2%. Maybe a total of 9%. AND we have to assume that the builder will pass on all of that 9% to the buyer instead of keeping all or some of it as additional profit.
"You don’t understand the basics of taxation and yet you post like you know something."
Remember, YOU were the one who said the employer kept the employee portion of FICA.
"And you are adding wrong because it is not just the employer’s payroll and tax savings that are used to reduce costs, it is also the employer’s suppliers and contractors that pass on their savings as well."
A house consists of labor and materials. Before any taxes are added by anyone, the builder saves around 9% on his labor as I outlined above. The builder also saves around 9% of his purchased materials because his suppliers also saved 9% on their labor.
All in all, the home builder is able to reduce the total price of his house by 9% (9% on labor and 9% on materials). Then he adds the 30% Fair Tax. For a whopping 18% increase.
And stop with the name calling, a$$hole. You have no cause to call me ignorant. Do it again and we're done on this thread.