Two things. One, 23% is a joke. When push comes to shove, it will not be introduced at that rate, and it will not remnain at that rate.
Two, it's very easy to raise the rate, yet have it appear to have a small impact.
Under the NRST for example, a $100 retail item consists of a $77 product plus a $23 tax (Yes, I know that looks like a 30% tax, but the NRST people say it's really 23%. Different argument for a different day. Bear with me here).
Now, let's say the government raises the NRST from 23% to 26% -- a whopping 13% tax increase! Your retail price goes from $100 to $103 to accomodate the tax.
To the consumer, therefore, that 13% tax increase looks only like a 3% increase. Hey, not so bad, huh?
Under the NRST for example, a $100 retail item consists of a $77 product plus a $23 tax
No. A $77 item would have a 23% tax of $17.81.
The total would be $94.81.
A $100 'retail item' would cost $123.
Now, let's say the government raises the NRST from 23% to 26% -- a whopping 13% tax increase! Your retail price goes from $100 to $103 to accomodate the tax.
Bull. -- A $100 'retail item' would then cost $126.00, tax included.
To the consumer, therefore, that 13% tax increase looks only like a 3% increase. Hey, not so bad, huh?
That 3% increase looks like a $3.00 increase [per hundred] to most rational people paulsen..
Why are you different?
"To the consumer, therefore, that 13% tax increase looks only like a 3% increase. Hey, not so bad, huh?"
You missed one very important point, which is that EVERYONE will have to pay the increase. Politicians can no longer play class warfare and divide and conquer. I expect that there will be substantial pressure to lower the rate.