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To: Shalom Israel
you won't convince me that their chosen method of expressing the tax wasn't picked for marketing purposes.

Of course I won't. You've obviously made up you mind because you refuse to consider the fact that you might have been mistaken.

I've told you why, and you've offered nothing to alter my conclusion. Repeating ad nauseam that income taxes are calculated inclusively won't help: I already replied that sales taxes are always calculated exclusively.

Nothing? I've offered a detailed explanation that shows that comparing an NRST to current federal taxes can only be done fairly using tax-inclusive rates. If you want to ignore realities and simply get into word parsing, so be it, but the facts are still the facts.

42 posted on 12/16/2005 8:55:26 AM PST by kevkrom ("Zero-sum games are transactions mostly initiated by thieves and governments." - Walter Williams)
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To: kevkrom
Nothing? I've offered a detailed explanation that shows that comparing an NRST to current federal taxes can only be done fairly using tax-inclusive rates.

The detailed explanation was asinine. Trying to snow me with numbers won't work; my math PhD is old, but not that old. The simple fact is:

  1. For congressman, the only relevant comparison is that the tax is "revenue neutral". (That's of course debatable, but it is nevertheless the only thing they need to hear.)

  2. For the majority of citizens, neither the inclusive nor the exclusive rate will allow them to compare the impact of the tax on them. "23% of your consumer spending will actually be tax" is a pointless statement to people who don't know how much they spend on consumer purchases in the first place.

  3. If someone does know what he spends, then the statement is still useless: he would first have to calculate his new total under the proposed tax, which requires him to solve a (simple) algebraic equation: S=.77N for N, where S is the current consumer spending, and N is the new, tax-inclusive consumer spending. The number he wants is then (N-S), the amount of the tax. Shockingly, that happens to equal 0.3*S, where he already knows S.

  4. Even the shop keeper isn't helped by this statement: in order to estimate 23% of gross receipts, he must first calculate his new, tax-inclusive, gross receipts. What he needs to know is that the $3 gallon of milk on his shelf will be marked up to $3.90, which will affect sales. He too needs the exclusive rate.

In short, the calculation is helpful to nobody. It has exactly one advantage: it's a smaller number. Everyone affected by the tax must solve for the exclusive number in order to assess the actual impact of the tax on themselves.

43 posted on 12/16/2005 9:06:24 AM PST by Shalom Israel (Well, I got better...)
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