Also, the FairTax is the only retail sales tax EVER that is calculated as tax inclusive.
If your State has a 7% sales tax, the sales tax is calculated by simply multiplying the retail cost of the item by 0.07.
The FairTax calculation is anything but simple. A few years ago, I figured out all the algebraic expressions that are involved, but today it hurts my brain to try to think about it.
The basic concept is that the 23% is calculated on the sum of the retail price of the product/service and all of the taxes. It’s immediately obvious that if you add the retail price and the taxes, then take 23% of the sum, you will get a larger number than if you multiply the retail price by 23%.
If you take a product/service that retails for about $77, the gross payment will be $100. IOW, the tax would be $23, which is 23% of $100. Now, since the retail price is $77, then the tax of $23 is about 30% of the retail price.
Just remember, the Fair Tax is the only retail sales tax that is calculated that way, by including the tax in calculating the tax percentage. That is what tax inclusive means.
All other retail sales taxes are calculated as tax exclusive, the tax itself is excluded from the calculation. Like your State sales tax.
This is true in the U.S., but not true in many other countries. That seems to be the model Americans for Fair Taxation used.
Now go back to your tax return, compare your income net of taxes to your gross income, and use your math skills to tell us how much your take home pay would increase if the Fair Tax were passed.
To use your math, if you made $100,000 gross, and netted $77,000 take home pay, and the Fair Tax passed, your take home pay would increase by $23,000. That is a 30% increase in take home pay over your current $77,000. That increase in take home pay would cover cost of the new tax.