How is that a tax on a tax?
The FairTax does not eliminate state and local sales taxes, but it does do away with the ability to deduct them from federal taxes.
Today’s sales taxes are paid with after tax dollars. Hence a $10 item with $1.14 in sales tax requires that i earn [assuming a 21% effective total income tax rate] $12.66 for the item AND an additional $1.44 to pay the sales tax.
The sales tax [$1.14] has tax of .30 on it. That’s tax on tax. Get it now? That’s what so many ignoramouses have used as an excuse to reject the nrst. But the nrst does NOT tax sales taxes. Only the income tax does that.
To deduct sales tax, one must itemize. The number of filers that itemizes is about 1 in 4. Of the 1 of 4 that itemize, about 1 in 10 claim sales taxes. There are about 39 out of 40 filers who are paying tax on tax - giving the gov’t even more money to spend. Aren’t you for giving them less?