It yields a valid figure that at least one of the "antis" tried to characterize as not being believeable (thinking it was too low) simply because his own idea of an effective tax rate was 23% tax inclusive - which no one will ever have under the FairTax. When you are fixated on opposing a plan like the FairTax, you can't admit that it might help you.
But by all means, use it and get a very close idea of the effective rate you'd have - most taxpayers have no idea. What throws most people is that they hear the demagoguery that "... everything will cost 30% more ..." (or 50% per one Georgia Boy) which simply ignores the many things untaxed under the FairTax and which reduce your taxable income. For example things such as:
1) Mortgage payments (p&i both).
2) Other loans and credit cards (p&i also).
3) State and local taxes including property taxes.
4) Educational tuition payments.
5) The entire amount of savings/investments.
6) Money contributed to church/charity organizations.
7) Money given as gifts to others or political contributions..
8) Used items such as real estate, cars, furniture, etc.
on which tax has already been paid. All these reductions in your taxable income make a sizable difference in most cases from your present effective income tax rate.
Since when is interest not taxed under the fairtax? It is taxed, just by some convulated method. And the principle of the house is very much taxed, so it is misleading to suggest it is not.
2) Other loans and credit cards (p&i also).
Interest is taxed, so that is untrue. Most credit cards are several times greater than any index rate set by the government.
3) State and local taxes including property taxes.
State and local taxes are taxed, just not directly. Under the fairtax, States and local governments now would have to pay 30% sales tax? Does the state print that money or do they collect it from taxpayers?
4) Educational tuition payments.
That's true.
5) The entire amount of savings/investments.
But money you already saved and paid taxes on, you will be taxed on again when you spend it. The fairytax calculator assumes you have not saved any money in the past.
6) Money contributed to church/charity organizations.
Unlike the current system, there is no tax benefit to being a church or charity organization under the fairtax. They will be taxed on their expeditures. You will have to give more to do the same.
7) Money given as gifts to others or political contributions..
Gifts are treated better under the fairtax.
8) Used items such as real estate, cars, furniture, etc.
For used items, they do fair better under the fairtax. But there are problems with most of the other points.