[SALChamps03]

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.

[Always Right]

The taxes, which add 23% to the employer's cost per unit is cut.

No it is not.