So you are basing all of this on one line in one study.
Hardly.
But a 22% drop isn't logical unless wages are reduced by the amount of payroll & income taxes workers were previously paying,
That the impact of taxes on business cost goes far beyond the payment of the tax itself both direct paperwork costs and indirect oppertunity costs are removed with the repeal of the current tax system. Indeed reduction of wages are not in the offing quite the contrary, with capital investment comes increased productivity and raising wages not the contrary.
| The most important cause of higher real wages is a higher level of capital investment per worker. A worker or farmer is more productive if he has more machinery and equipment to work with, particularly new equipment that incorporates the latest technological innovations. Higher productivity leads to higher real wages. It is impossible, on a sustained basis, for an employer to pay workers higher wages than their productivity justifies because employers that did so would go out of business. Higher investment levels per hour worked explain as much as 97 percent of the increase in inflation-adjusted wages since 1948, as can be seen in Figure 1.[1]
FIGURE 1: This figure shows the positive correlation between real wage rates and capital investment per hours worked, from 1947 to 1992. During this time period, the amount of capital per hour worked increased steadily and Note:
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which we both know is impossible.
You speak only to your own incapacities for analysis.
Even the authors of that study say their model overstates the true short run effects.
Lets see, the long run effects projected by that study extend to 25% lower producer prices, and 30% lower investment goods prices(durables etc.)
The only question raised by the authors is how rapidly and much labor supply may change in the quest to aquire more dollars for taxfree investment, not how rapidly prices fall in the first year to 20% as a consequence of 80% increase in investment due to taxfree incentives and the drive to price reduction by businesses converting lower costs to recover market shares and profitibility.
The less sucessful that increased labor is in aquiring more dollars for lack of initial labor demand, the faster prices will fall as more of the available pool of earnings are diverted to investment and saving over consumer purchasing.
Rising demand for investment opertunities, and lower business costs are the primary drivers behind lower product prices as the economy moves towards price equilibrium where NRTS plus product prices are commensurate with the current price paid (including embedded tax burden costs the NRST removes).
The net effect is to drive what we a consumers pay under the NRST to be the same as we pay now for our goods and services. Demand for taxfree investment slowing demand for goods and services act to assure that consumer prices fall to a level where total payments(NRST + shelf price) for goods and services do not exceed what is paid for those same goods today with their embedded tax burdens.