If you earn $100 and $23 of it goes to tax, what rate is that? Some say 23% [23/100], some say 29.87% [23/77].Nobody expresses the income tax in exclusive terms, just like nobody expressed a sales tax in inclusive terms until the NRST fans came along.
"Nobody expresses the income tax in exclusive terms, just like nobody expressed a sales tax in inclusive terms until the NRST fans came along."
Which is just the way that the SQLs liked it, because it introduced a subtle bias in favor of income taxes that few Americans were aware of.
agreed. why would they? exclusive doesn't make sense when you're trying to express total tax burdens.
...just like nobody expressed a sales tax in inclusive terms until the NRST fans came along.
Sales tax has never represented the total tax burden until the introduction of the NRST.
It doesn't make sense to compare total tax burdens in different units. Nor does it make sense to express total tax burden in exclusive terms. Hence, inclusive terms are used.
I understand that rate method can easily be used by detractors to badmouth the nrst for just the reason you state - traditionally, sales taxes have been expressed in exclusive terms. But never before has the total tax burden been sales taxes. Total tax burden is incomprehensible in exclusive terms.
The inclusive income tax rate of 33% means 33% of my total income goes to tax.
The 33% inclusive income tax rate is the same as a 50% exclusive rate because the tax is 50% of your income not including tax paid.
The inclusive nrst rate of 23% means 23% of my total spending goes to tax.
The 23% inclusive rate nrst rate is the same as ~30% exclusive rate becasue the tax is ~30% of what you spend not including tax paid.
It's far easier to figure the amount of sales tax mentally using exclusive terms.
It's far easier to figure total sales tax burden using inclusive terms.
I use both methods. Exclusive to mentally figure the amount of tax due on an item .... inclusive to represent my total tax burden.