[Your Nightmare]

Touche -- that's what I get for going from memory.

So why would anyone want to compare the sales tax rate to the income tax rate after the income tax is gone?

There are other issues with using the tax inclusive rate. Let's say we have a 20% tax inclusive NRST rate. Some politician says he is going to increase the rate 5% to 21%. The people say "OK, a 5% increase in taxes is alright, but no more!" Well, a 5% increase in the rate is more than a 5% increase in taxes collected. It's a 6.33% increase.

There are other reason the tax inclusive rate is simply the wrong way to express a sales tax.

[robertpaulsen]

It's even worse than that.

Yes, the politician says 5%. But when you look at your receipt, your $100. purchase ($80. plus $20 NRST) is now $101. ($80. plus $21 NRST).

To the consumer, this looks like a 1% increase, not 5%. Very easy to "hide" a large tax increase.

(In a $13 trillion economy, that 5% increase just generated $650 billion in additional government revenue.)