The calculator also has a mathematical error. You receive the "prebate" but they assume you never spend it (you pay FairTax on it when you spend it thus reducing it's real value).
You are correct, it doesn't consider that. It is pretty bad with their millions they have spent on economists, they can't get a simple calculator correct. I suspect the fairtax knows the flaws, but fairtax.org has never let the truth get in the way of spin. That philosophy has clearly rubbed off on at least one of their posters.
These aren't exactly small errors either. The prebate is about a $600 billion program, so there is $138 billion of embedded taxes that the calculator is hiding. And the vast majority of all credit card purchases are items where the fairtax is charged, so all that 'principle' is in fact taxed at the time of purchase. So there is many hundreds of billions that the fairtax calculator just conviently misses. I am not sure how the fairtax calculator can say all interest is not taxed, when the bill says it is. Fairtax.org is a propaganda machine.
That's not a "mathematical error" at all. The prebate should not be included as spendable income to have a comparative basis between the income tax and the FairTax. With the same income under the two systems the only method of reasonable comparison is to not include the prebate as though it were spendable income since there is no comparable increase on the income tax side.
Your error is assuming that it will be spent on something besides reducing taxes.
We have had this discussion before. IMO they should state this, but it isn't an error.
Just like today's tax refund amount is used to reduce one's tax burden, tax refunds under the nrst are used to reduce one's tax burden.
Inlcuding the rebate to spend and tax is like using today's refund to include in taxable income this year.