[DTxAg]

Have you taken into account the 15% FICA taxes that will no longer be taken out of their salary? How about the effect on prices when corporate tax rates drop from 35% to 9%?

I did. Payroll is no longer a business tax deduction, so a company would pay 9% of an employee's salary in taxes. Now, the company pays 7.65% in taxes. And few companies I know pay 35% in taxes. Ford, for example, had $3 billion in taxable income in 2010 and paid something like $68 million.

[DTxAg]

And for small businesses, they often have little profit at the end of the year once the employees and owners are paid, so they wouldn’t pay 35% on much of anything, but they would see an increase in taxes on payroll.

[Pan_Yan]

And few companies I know pay 35% in taxes.

Exactly right. Some pay much, others pay little. By removing all the loopholes and deductions every company competes on a level field for the first time in decades. With real, fair competition without goverment manipulation I would think the free market would soar and prices would drop.

[Crusher138]

Since when is payroll not a business tax deduction? From the IRS web site:

Payroll And Benefits

Typically, payroll expenses and employee benefits are the largest expense of small business employers. Payroll and employee benefits include gross salary, hourly wages, employee health insurance and administration fees for company retirement plans. Fortunately, payroll and employee benefits are a business tax deduction. However, the IRS requires employers to file annual and quarterly payroll tax returns. Periodically, the IRS matches amounts reported on annual payroll tax returns to amounts reported on annual income tax returns. Therefore, business owners must ensure payroll and employee benefits have substantiated backup.