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To: Man50D
Clearly you have not looked at the link to the AFFT website I provided to you in post #15 before making your incorrect assumptions.

BTW, when you finish taking a logic course, you will know that I never assumed 23% was quoted for marketing reasons: instead I concluded it. The assumption was one you already granted: sales taxes are always calculated exclusively, therefore stating them in a novel way must be done for a reason. Observing further that 23 < 30, I conclude that they consciously picked the calculation that sounded smaller.

34 posted on 12/16/2005 7:22:10 AM PST by Shalom Israel (Well, I got better...)
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To: Shalom Israel
I never assumed 23% was quoted for marketing reasons: instead I concluded it.

Your logic is then faulty, because you have reached an invalid conclusion. In fact, it is the opposite conclusion that is correct: those who insist on using the tax-exclusive rate are doing so to make the tax look larger.

The NRST rate is quoted in tax-inclusive terms specifically so that it can be correspondingly compared to income and payroll taxes on an equal footing. For example, I earn $100, of that I pay $20 in taxes and $80 for goods and services. What is my tax rate? Is it 20% of $100 or 25% of $80? Both are correct, but which one is useful in context?

Let's try to compare the NRST (at the 23% tax-incluive and 29.87% tax-exclusive rates) to a 17% flat income tax. Of course, that flat income tax doesn't include 7.65% payroll taxes, so let's add that in for a total of 24.65%.

So, which one NRST rate is the best one to use for comparison? If I use the tax-inclusive rate (23%), I can easily see that I can buy $77 worth of goods for each $100 that I spend. As a direct comparison, I can buy $75.35 worth of goods under the flat tax with that some $100 pre-tax money. I was able to figure out those numbers using the same calculation for each: pretax money times ( 100% minus the tax-inclusive rate ).

If I use the tax-exclusive rate (29.87%), however, when I ask the question of how much goods and services I can buy with my pre-tax $100, I have to use an entirely different equation: pretax money divided by ( 100% plus the tax inclusive rate ).

In the first case, the rates can be compared on the same footing -- an apples-to-apples comparison. In the second, since I have to use different means of calculating the same answer, I have an apples-to-oranges comparison.

But, you may say, isn't it just a case of how I chose to frame the question? Of course it is -- but the question as I framed it is what the average person wants to know: I've got $X, how much stuff can I get for that after taxes are taken out?

The honest fact is, it is the NRST opponents who insist on using the tax-exclsuive rate in order to scare people into thinking the rate is higher than it is. Take our example again -- using an honest head-to-head comparison, the NRST rate (23%) is actually lower that the flat tax plus payroll taxes (24.65%), and the example shows that after-tax money follows these numbers. However, those more interested in the flat tax use the tax-exclusive number (29.87%) to make the NRST look larger than the flat tax plus payroll taxes.

35 posted on 12/16/2005 8:07:47 AM PST by kevkrom ("Zero-sum games are transactions mostly initiated by thieves and governments." - Walter Williams)
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To: Shalom Israel
sales taxes are always calculated exclusively, therefore stating them in a novel way must be done for a reason. Observing further that 23 < 30, I conclude that they consciously picked the calculation that sounded smaller.

And what led to your "conclusion"? Are you really telling this forum that since 23<30 that you know some special reason for the rate being expressed inclusively? C'mon .

You can't let that crap fly here on FR. If you want to connect your conclusion to the assumptions you must explain the conection. Your "connection" was 23<30. Not even close to a connection... in your mind, perhaps... but you have some unspoken positions leading you to this. Why not share them? C'mon? You ashamed of your beliefs? What's the real reason you reject tax reform? Not willing to say? WHy not? Embarrassed? Ashamed?

88 posted on 12/18/2005 11:06:03 AM PST by Principled
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