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To: xrp
Now, my yearly budget is $20,000 and if I paid 23% (FairTax) on that in consumption taxes, I'd pay $4600. How is that increasing my burden?
Does your budget for $20,000 include taxes? Because if you bought stuff priced at $20,000 you'd pay $5,974 in taxes ($20,000 x 29.87%), not $4,600. The 23% comes from $5,974 being 23% of $25,974.

The rate in terms most people think of sales taxes is 29.87%.
11 posted on 09/17/2004 1:38:44 PM PDT by Your Nightmare
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To: Your Nightmare; xrp

The rate in terms most people think of sales taxes is 29.87%.

The rate as specified in the bill, and for the tax systems it replaces, is percentage of gross payment or income/wage as the case may be:

 

H.R.25

Fair Tax Act of 2003 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.25:


SEC. 2(a)(5) GROSS PAYMENTS- The term `gross payments' means payments for taxable property or services, including Federal taxes imposed by this title

SEC. 101(b) Rate- (1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

`SEC. 510. TAX TO BE SEPARATELY STATED AND CHARGED.

`(a) In General- For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase. For purchase of taxable property or services for which a tax is imposed by section 101, the seller shall provide to the purchaser a receipt for each transaction that includes--

`(1) the property or services price exclusive of tax;

`(2) the amount of tax paid;

`(3) the property or service price inclusive of tax;

`(4) the tax rate (the amount of tax paid (per paragraph (2)) divided by the property or service price inclusive of tax (per paragraph (3));

*** snip ***

 

So it can be reasonable compared against like expressions of the overall federal tax rates of the federal tax systems it replaces:

Tax Freedom Day 2004 PDF http://www.taxfoundation.org/sr129.pdf

 

Total Effective Tax Rates by Level of Government
Percent Net National Product(NNP)

Year Federal State Total
1996 21.3% 10.4% 31.7%
1997 21.8 10.3% 32.1%
1998 22.4% 10.4% 32.8%
1999 22.5% 10.4% 32.9%
2000 23.1% 10.4% 33.5%
2001 22.2% 10.5% 33.7%
2002 1 19.7% 10.2% 29.2%
2003 2 18.5% 10.1% 28.6%
2004 3 17.9% 10.0% 27.9%
1 Economic Growth and Tax Reform Reconciliation Act of 2001
2 The Job Creation and Worker Assistance Act of 2002
3 Job Growth and Tax Relief Reconciliation Act of 2003

Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations.

 

Or in terms of comprehensive income of CBO studies:

 

Effective Total Federal Tax Rate (Percent of comprehensive income)
Income Category 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
2001
All Families 22.2 22.4 20.4 20.9 20.9 21.6 21.5 21.5 22.0 22.6 22.9 22.9 21.5

Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
From, Effective Federal Tax Rates 1979-2001


12 posted on 09/17/2004 2:37:50 PM PDT by ancient_geezer (Equality, the French disease: Everyone is equal beneath the guillotine.)
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To: Your Nightmare

An tax increase I think not it still leaves him with $24,026 in untaxed income.


32 posted on 09/18/2004 1:58:02 PM PDT by Total Package
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