Oh, and yes I DO poke fun at you ... you're an easy target.
To the meat of the debate:
... I've not said that prices will drop 23% (or any other specific number) but just that they will drop a significant amount due to the embedded tax mechanism...
Well you HAVE said:
"Whether it might be 10, 15, 20, 25% - or perhaps more - is not yet known."My choice of 23% is both in your ballpark AND necessary for an after-tax price neutral outcome. What's the problem?
Nor, in fact, have I ever said that embedded tax costs were composed of only the cascading embedded taxes
Well, the multiple times you have been asked to define just what the components of "embedded tax costs" are, you decline to answer. AND your examples only include tax and NOT any "tax-related" costs. So surely, you'd be able to reach consensus on that simplified part of the equation before tackling the other parts.
Your pretense that wages must be cut for prices to drop (or that prices must rise) does not comport with reality.
Well, it's not just MY claim, it's also the claim of the economist who modeled the price drop in the first place Dr. Dale Jorgenson.
the amount that would be necessary to eual 23% of the sell price at Level 6 would be $66.44 x 0.23 = $15.28 which amount is clearly LESS than the 33.88% of embedded taxes which amount to $22.51
Of course; in fact it proves my point. That's because in the example you cite, profit (at 33% for each level) represents 98% of the retail sale price at level 6 ... again underscoring just how important the choice of numbers (inputs) to the model is. As I said, for your claims to be true embedded profit (do you like that term better?) must be at least 67% of final retail sales price to support a 23% price reduction. The example clearly exceeds that requriement and is indicative of just how out of whack your choice of 33% profit is.
The upshot of this is simple: Prices will not decline in the manner you claim.
I'm confused, are you saying that a drop of 23% in prices is required to retain the same amount of revenue as currently collected?
Your posts exhibit exactly what I stated about your arrogant and supercilious attitude. It shows up in almost every one of your posts including those I posted snippets from. And in this very post you display even more of the same attitude. It demeans you and you seem to not realize it so it makes you an easy (and vulnerable) target. One can feel the barely-contained anger and hatred just bubbling behind your posts waiting for an opportunity to burst forth. But that's your problem.
Indeed I've given a range in which I think price declines will fall, but I also said that I have not stated any sort of exact figure. Your attempt to get me to do so or to try to pretend I have said something I have not said reverts back to your attitude problem mentioned earlier. If "your choice" is 23% that's fine. It is not, however, mine - I have not made one beyond the range given.
Your 23% may not be so meaningful after all, you see, since it may very well be that the bill will end up with something like a 19% FairTax rate for revenue neutrality. THAT'S what you refer to as "the problem" - the rate is not yet determined and may be greatly lowered. Wouldn't that be grand???
As for what embedded tax costs might be, I've certainly defined them clearly enough to identify that they are composed of elements of cascading, embedded business income tax, of compliance costs whatever those mey be, and the intangible costs that influence business decisions and directions due to the convoluted income tax system. Your problem due to your own arrogance is that you somehow feel I must throw out some numbers so you may attack them. Give me a break; I've no wish to help you do that nor is it necessary to further identify the components of embedded tax costs. Perhaps you'd like to claim that there are no such costs? That would be quite in line with your identified attitude.
You fall prey to what others have done in claiming that the economist Jorgenson has claimed wages must fall. He did not despite all the opponents' claims that he did so. That's not what his study showed and you even agreed with that assessment with ancient_geezer in earlier postings. Are you now wishing to take back what you said to him? Sort of like putting the Genie back in the bottle isn't it?
As for your next-to-last paragraph where you say:
"... in fact it proves my point... "
... it actually does just the opposite and demonstrates conclusively what I have been pointing out on several threads now ... that you totally misunderstand what cascaded, embedded tax is and how it is placed into prices. Your attempt to substitute "embedded profit" for the failed try of "accumulated profit" is just more of an indication that you do not have any grasp of the subject. There is no such animal (either). The profit embedded remain in the particular level where it was earned which I had already told you when you were trying to use the term "accumulated profit".
It is the tax costs as a % of sell price that are embedded and passed along as I've explained to you several times with very clear examples. It is those costs that will be removed due to the removal of business income taxes. Any compliance, intangible, or even payroll costs (if applicable - which I doubt with the possible exception of the ER portion) would be in addition. It is clear there is ample leeway in prices inflated as they are by income taxes and other costs to be able to reduce prices significantly.
And finally -
The upshot of this is simple: Prices will not decline in the manner you claimed.