The way the article is written (and the way sales tax proponents present the idea) is misleading. As the article says, the government gets 23% of every dollar you spend. Your $100,000 house would cost about $130,000.
23% of $130,000 is about $30,000, the cost of your house.
Should have read:
23% of $130,000 is about $30,000, leaving $100,000, the cost of your house.
No, the $100,000 house would cost $100,000, with 23% of the taxable amount(*) of that $100,000 being remitted as taxes. the NRST is a repalcement tax, not an additional one.
(*) The taxable amount on a new house would be the amount over the valuation of the unimproved property -- the property itself is "used" by definition. A resale house would have no sales tax since it is considered previously taxed.
THe national retail sales tax is a replacement of existing taxes, not a tax in addition to what we already pay.
Of course you know that about 25% of the cost of a new home is hidden income tax costs, payroll tax costs, and compliance costs of the entities involved in the production of the home... so when those costs are removed the price goes down such that when the sales tax is added, the price gets back to the same it was to begin with.
Price stability - prices of goods will change little, if at all. And prices are just as likely to fall slightly as rise slightly.
$100,000 today buys you the same house under the nrst.
The way the article is written (and the way sales tax proponents present the idea) is misleading. As the article says, the government gets 23% of every dollar you spend. Your $100,000 house would cost about $130,000.
23% of $130,000 is about $30,000, leaving $100,000, the cost of your house.
Unlike today the average person must earn about $132,000 gross, to pay for a $100,000 home after the income taxes and FICA on his wages.
Effective Total Federal Tax Rate (Percent of gross income) | |||||||||||
Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
All Families | 22.8 | 23.4 | 23.5 | 21.4 | 21.8 | 22.6 | 22.5 | 22.6 | 23.5 | 24.7 | 24.2 |
Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0
Ooops! nevermind