Both, it depends on your point of reference. In terms of a sales tax as you are used to paying, it is 29.87%. In terms of an income tax you're used to paying, it's 23%. The two tax systems use different mechanisms (tax-exclusive for state sales taxes, tax-inclusive for income and payroll taxes).
The example is easier to understand on a $100 total bill, after taxes. The pre-tax item price is $77, the tax is $23. Under the state sales tax model, the tax rate is 23/77 = .2987 -- under the income tax model, the tax is 23/100 = .23 .
Both, it depends on your point of reference.
In terms of a sales tax as you are used to paying, it is 29.87%. In terms of an income tax you're used to paying, it's 23%. The two tax systems use different mechanisms (tax-exclusive for state sales taxes, tax-inclusive for income and payroll taxes).
The example is easier to understand on a $100 total bill, after taxes. The pre-tax item price is $77, the tax is $23. Under the state sales tax model, the tax rate is 23/77 = .2987 -- under the income tax model, the tax is 23/100 = .23 .
The example is easier to understand on a $130 total bill, after taxes. The pre-tax item price is $100, the tax is $30. Under the state sales tax model, the tax rate is 30/100 = .30 .
-- Under the "income tax model", you can say the tax is 23/100 = .23 , but it makes no sense to do so, seeing that the actual tax is 30% .
It is mind boggling that Fair Tax supporters are trying to promote the Act by using a BS "model" to misquote the actual taxes paid .
The Fair Tax idea sells itself without playing games over percentages .
As I see it, the actual tax percentage paid would have to be printed on all sales receipts in any case.
That percentage would be 30%, -- correct?