You lose right there.
Strike one: The FairTax cannot be compared with the sales taxes you pay today. The FairTax will be a FEDERAL tax, and will have no effect whatsoever on those state or local sales taxes you pay at present. ... it’s still 30% no matter how you present it.
Strike Two: It is 30% if it's figured one way, and 23% if figured another -- as has been show dozens of time before on this forum and on the Fair Tax web site.
The funny thing is, I wasn’t trying to argue the math at all, just pointing out that the public will not accept a tax that applies 30% to every item and services they purchase.
I read somewhere that surveys have been done which show that the public are not opposed to the idea of a sales tax up to around the 20% to 25% mark, but when you get much higher - i.e. 30% then it’s met with a high disapproval rate. Hence the FT advocates using the inclusive 23% number instead of the more easily comparable 30% rate.
To argue that the FT is not a sales tax is ridiculous. As others have pointed out, companies will still advertise their wares at the tax-exclusive price and then tack on 30% to the bill at the register. How on earth is that “not like a sales tax”?
In the U.K. most retail sales are advertised and transacted using the VAT-inclusive rate. Guess what? That rate is still recognized as 17.5% on top of the price of the goods (i.e. value-added-tax) and not 14.8% of the inclusive price.
So when people are informed that the Fair Tax is a 23% tax on everything you buy they will naturally assume that means for every $1.00 they spend they will have to pay an extra $0.23. That’s how 200+ million Americans have been doing it for the whole of their lives. That’s how a sales tax is calculated, and that’s how they would expect the Fair Tax rate to be described, and they won’t be happy when they find that the real equivalent rate is 30%.
Fair tax advocates may argue that they use 23% as the better equivalent to the current income tax system, but it is mighty convenient for them that people won’t understand that the 23% tax on things they buy is not calculated the same way as the 6% or 8% or whatever sales tax they pay on everything today.