That's an untaxed price which is meaningless. Once you add the 30% tax you end up with about a 20% increase in costs. Of course you knew that, but are just being disingenuous.
"Once you add the 30% tax you end up with about a 20% increase in costs. "
NO, you don't. You end up with an increase in prices paid at the cash register, the cost you end up paying is the price of the thing as shown on the receipt plus in addition the amount for whatever your effective FairTax rate might be.
There is also no "30%" rate IAE. The correct marginal rate is 23% tax inclusive and correctly that's a 29.87% te rate when actually calculated from the ti rate. But no one ever pays the maximum marginal rate as his cost since he's already received the prebate.
It is the effective rate that is more meaningful since that's what the taxpayer's cost comes down to ... what he ends up paying out of pocket for the year.
You are omitting the income tax from your "costs" but including the nrst tax. That's why your numbers are off.
While it is true that nrst tax inclusive prices will be higher, this does NOT mean the cost will be higher.
The cost of an item cannot be accurately measured in both tax systems without including the effect taxes have on prices!
You are trying to do a comparison omitting the effect of the income tax - ie your comparison completely omits any costs whatsoever to indivduals from the income tax.
Can't do that.
Here's a comparison of costs, illustrating that higher nrst inclusive price is still a lower cost:
A $100 baseball glove I want to buy today costs me $133 in earnings (I have a 25% overall effective federal income/payroll tax rate).
Under the nrst, the shelf price falls to $91 by eliminating ER fica, business compliance costs, and any business income tax costs. My nrst effective rate would be a MAX of 17% - So using my 17% max possible effective rate, the baseball glove will cost me $109.64 in earnings.
Under the income tax, the glove costs me $133.
Under the nrst, the glove costs me %109.64.
So even though the price is higher (100 vs 109), the cost is less. When you remember to include the income tax in your cost calculation it's easy to see.
BTW, you can find your effective rate by dividing the sum (income tax plus payroll tax) by income. That gives a tax inclusive rate.
To find a reasonable estimate of your nrst effective rate, you can go to http://www.fairtaxcalculator.org/ . It also gives a tax inclusive rate.
Alternatively, find your rebate amount, subtract it from tax due. Divide tax due by spending (a maximum rate can be found by using income for spending).
Once you add the 30% tax you end up with about a 20% increase in costs.
You are omitting the income tax from your "costs" but including the nrst tax. That's why your numbers are off.
While it is true that nrst tax inclusive prices will be higher, this does NOT mean the cost will be higher.
The cost of an item cannot be accurately measured in both tax systems without including the effect income and payroll taxes have on earnings!
You are trying to do a comparison omitting the effect of the income tax - ie your comparison completely omits any costs whatsoever to individuals from the income tax.
Can't do that.
Here's a comparison of costs, illustrating that higher nrst inclusive price is still a lower cost:
A $100 baseball glove I want to buy today costs me $133 in earnings (I have a 25% overall effective federal income/payroll tax rate).
Under the nrst, the shelf price falls to $91 by eliminating ER fica, business compliance costs, and any business income tax costs. My nrst effective rate would be a MAX of 17% - So using my 17% max possible effective rate, the baseball glove will cost me $109.64 in earnings.
Under the income tax, the glove costs me $133 in earnings.
Under the nrst, the glove costs me $109.64 in earnings.
Looking only at price omits the cost of the income tax to individuals. That gives an inaccurate comparison.
So even though the price is higher (100 vs 109), the cost is less under the nrst. When you remember to include the income tax in your cost calculation it's easy to see.