How will the businesses have the same profit per unit?
Look, cut 20% off the average young family's income. They are heavily leveraged for the house, vehicles, and student loans. Those debts are not magically going to drop by 20%.
What you will cut is their disposable income.
When that goes, it won't matter that your chain stores cut prices 5 or 10%, because the money that was left over from the fixed costs won't be there. When the stores cut prices, the tax will eat up the difference for the buyer. If the store cuts its price 20%, and the tax is 22%, you pay 102% of what you pay now--only you pay it out of 80% of your current income, after the mortgage, student loan payment, and vehicle loan payment, etc.
Actually, I don't care so much, my house is nearly paid for and when a pile of people go teats up, I'll be standing in the back at the auction waiting for some really good deals.
Recievership. Perhaps you've heard of that. Maybe you have heard of Depression (not the kind you medicate away, either).
The employer's income is not being cut by 20% (it's 23% by the way). The taxes, which add 23% to the employer's cost per unit is cut. The savings realized by the employer is passed on in the form of a price cut. Cut the cost 23%; cut the price 23%, and the per unit profit remains the same.