That calculation has you calculating a tax on a tax. This makes my point even more pointed. The car costs 38,500 and you pay a 30% tax of 11500. Multipling the total price by the tax rate of 23% gives a tax on the car plus a tax on the tax. This is worse than I thought.It's an iterative process unless you convert the inclusive rate to the exclusive rate.
x 23% x 23% x 23% x 23% x 23% x 23%
As I said it is worse than I thought. There is a mathematical fallacy involved in it which I haven't time to figure out at present.
Depends on how you l;ook at it. The "price" of something is what you pay for it - including tax. Paying $50,000 in the one case or $129.87 in the other is merely lising the total price you pay.
The tax in either case is 23% t-i (or 29.97% t-e). It is the same amount of tax in either case for the particular item. Are you 6 feet tall or 72 inches tall??
Instead of the odd example you gave you could have just divided $100 by (1-0.23) which gives 29.97% directly. Same result. The amount you p[ay is the same also - $129.87 for your example.