[Mark was here]

You walk up to someone who is not all cranked up on your inside baseball. You say we want to swap the Income tax for a sales tax. He asks what is the tax rate. You say 23%. He takes it to mean the tax on a $100 purchase will be $23.00.

Just as any other sales tax.

If you said the truth, according to how we compute sales taxes, 30%, then you would have a greater risk of having the prospect run away from you as fast as he could.

Then you would have to shout "wait you haven't heard about the pre-bates yet!"

[DivaDelMar]

The prebate is factored into the rate calculation, just as exempting “necessities” would narrow the base, necessitating an increase in the rate.

When I’ve explained the rate difference to groups, I always start with the $1.00 example I gave you. When I ask what the rate of the tax is, they ALWAYS respond: “23%.” When I explain that if they want to spend $1 on goods and they will have to pay 30 cents in tax, and I ask what the rate is, they ALWAYS respond “30%.” After saying, “But wait a minute, you just told me the rate was 23%!” I launch into a discussion of tax inclusive rates vs. tax exclusive rates.

THERE IS NO INTENT TO DECEIVE, only a genuine desire to provide a valid basis of comparison to the income tax.