You wrote:
"How do you figure a 20% decrease in retail prices? The "hidden" padding companies charge to offset the cost of dealing with income taxes? What makes you think they will remove that from their base prices? One word... COMPETITION! When Ford drops the price of their cars, GMC will follow (or sit by and watch their share-of-market shrink big-time).
When the car manufacturer (and dealer) can make the same amount of dollar profit after dropping their prices upon enactment of the FairTax, they will do it.
Dr. Jorgenson (Harvard Business School) determined that 20%-30% of the price of a product was the amount 'hidden' therein to cover the producer's Income Tax (and compliance costs).
When Ford drops their price, if GMC doesn't follow suit they will suffer a big drop in their share-of-market and Share-Of-Market is the ALTAR at which big-time, hard-goods sellers worship.
I spent 36 years in that game. Competition rules!
Cliff Cofer - State Director, AFFT Volunteer Iowa Team
* * Bye, bye... Income Tax (and IRS)! We won't miss ya' at all! * *
Competition! Yes. You mean like the many industries who members agree not to let a price drop below a certain level? You must remember, because the corporations sure will, that people will
expect to pay the same price only 30% higher.
But, anyway, that is a theory. It is not a certainty. I think it not wise to upset the entire structure of the country based on that sort of thing. Once such a change is made, there will be no going back.
Dr. Jorgenson (Harvard Business School) determined that 20%-30% of the price of a product was the amount 'hidden' therein to cover the producer's Income Tax (and compliance costs).
He did? I have forgotten how many payrolls I've written for business in my 30 years in programing. What cost?
Everything is done by computer. The payroll clerk doesn't spend more than moment of her time doing a payroll (unless there are errors). In some companies I've serviced, the PR clerk anly came in twice a week.
Then, after taking taxes out, which is a automated function, the clerk posts the fed and FICA amounts to the bank account for that purpose and makes the deposit. At the end of the quarter a series of reports are run, without employee supervision, and mailed to the IRS.
What costs did this dude think he found that could possibly increase each manufacture product item 20%-30%? Did you check his methods and numbers, or did you take his word for it?
