Replies

Exactly.
In plain english, the Fair Tax rate would be 29.86% .. And be printed as such on a sales receipt. Correct?

[I doubt that the proposal would ever be accepted in that form, but whatever]

Yes, if I understand your question.

The confusion about the 23% is the way the bill is written. I believe it is normal for federal tax bills to be written in language that thinks about the taxation as taking a portion of what is there, not adding an additional portion to it, (the FairTax is no diferent) hence the wording being 23% of gross. It is the vendor who is required to remit the correct portion of his proceeds. If $129.87 is collected by a vendor, they would be expected to remit 23% (or $29.87) to the state on behalf of the federal government. The consumer would see this as a sales tax of 29.87% on what he would pay without the tax.

Exactly.
In plain english, the Fair Tax rate would be 29.86% .. And be printed as such on a sales receipt. Correct?

H.R.25

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

`CHAPTER 5--OTHER ADMINISTRATIVE PROVISIONS

`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));
`(5) the date that the good or service was sold;
`(6) the name of the vendor; and
`(7) the vendor registration number.

In plain english, the Fair Tax rate would be 29.86% .. And be printed as such on a sales receipt. Correct?

In plain english the FairTax rate is 29.87% and no, that is not what would be printed on a sales receipt. By law, the sales receipt would have 23% printed on it. Of course, the state sales tax printed on receipt will be the tax exclusive rate. That won't be too confusing, will it? /sarcasm

This exposes the lie in their "for comparison" reason for using the tax inclusive rate. Who would be standing at a register long after the income tax is dead and buried and be wanting to compare the sales tax rate to the income tax rate? This is all a ruse to make people think the FairTax rate is lower than it actually is.