[Principled]

How about just $100*1.2987=$130?!

BTW your flat income tax (or is it VAT today?) measures its income tax and its payroll tax with tax inclusive rates - you know, the amount withheld from your checks is measured tax inclusive under the Flat income tax. The flat income tax would also allow you to measure the tax costs hidden in prices tax inclusive.

Of course, just like the nrst, rates can be expressed either way. Except for withholding - because there is no withholding under the nrst. ANd the amount the nrst adds to prices is not hidden - it's visible on receipts... both in amount and tax inlusive rate.

How do the VATS you love express their rates (this depends on country)?

[Your Nightmare]

BTW your flat income tax (or is it VAT today?) measures its income tax and its payroll tax with tax inclusive rates - you know, the amount withheld from your checks is measured tax inclusive under the Flat income tax.

But a flat tax is a subtractive tax so the inclusive rate is the correct method. A NRST is an additive tax so an exclusive rate is the correct method.

[Your Nightmare]

The big difference between the sales tax and an income tax or flat tax, and the reason the inclusive rate is appropriate for the income tax or flat tax, is that a sales tax adds the tax to the base, the income tax or flat tax subtracts the tax from the base. This is significant because a tax inclusive sales tax is the percentage of the "gross payment" (including sales tax) that goes to taxes. If you add or change a sales tax rate being applied, the gross payment changes, and the amount of tax the other sales tax rates collect is changed.

Most people don't realize that the FairTax rate is actually the sum of three separate rates, the general revenue rate; the old-age, survivors and disability insurance rate; and the hospital insurance rate. The general revenue rate is set statutorily at 14.91%. The old-age, survivors and disability insurance rate and the hospital insurance rate will change every year (yes, the FairTax rate changes every year) as determined by the Social Security Administration. The charts below show what happens to the general revenue rate when there is an increase in the the old-age, survivors and disability insurance rate and the hospital insurance rate (which are combined here for simplicity).

Example:

Tax Inclusive General Revenue Rate	14.91%
Combined Social Security & Medicare Rates	8.09%
Total Rate	23.00%
Gross Payment on $1000 item	$1,298.70
Amount going to General Revenue   (14.91% x $1,298.70)	$193.65
Effective Tax Exclusive General Revenue Rate	19.37%

Now with an increase in the combined Social Security& Medicare rates (the ones set by the SSA) and keeping the statutory 14.91% general revenue rate.

Tax Inclusive General Revenue Rate	14.91%
Combined Social Security& Medicare Rates	10.00%
Total Rate	24.91%
Gross Payment on $1000 item	$1,331.74
Amount going to General Revenue   (14.91% x $1,175.23)	$198.56
Effective Tax Exclusive General Revenue Rate	19.86%

This shows that if the Social Security and Medicare sales taxes are increased, the gross payment that the general revenue tax inclusive rate is being applied to is increased thereby increasing the amount of tax it collects. So it's a general revenue tax increase, about $50 billion a year, that has never been voted on by Congress or signed into law! None of this would be an issue if the FairTax was stated in the correct tax exclusive method.