[frogjerk]

1. The 23% sales tax rate turns 37%. A retailer who sells an item for $100 must charge his customer an additional $30 for federal sales tax.

Wrong. The customer will pay $100 and the seller keeps $70 and sends $30 to the government.

So the customer is paying $100 for a $70 item? What's the difference?

[Phantom Lord]

So the customer is paying $100 for a $70 item? What's the difference?

There is a big difference. The way Always Right wrote it up, if you purchased a $100 item you would pay $130 (he then jumped it to $137 because he claims that states would have to drop their income tax and switch to a sales tax, which they won't).

And the reason it is different is because the tax inclusive (pay $100, retailer gets $70, gov. gets $30) comparrison is how you have to do it for an apples to apples comparrison with income taxes.

Just like with income taxes. And I'm using easy round numbers here for ease. If you earn $1,000 you send $300 to the government and keep $700. You don't keep $1,000 and then send $300 to the government.

In the end it works out the same either way, but for an apples to apples comparrison, one must used the tax inclusive method.

[ancient_geezer]

So the customer is paying $100 for a $70 item? What's the difference?

None at all.

Its 23% of the total payment at the register as the seller who remits the tax views it, or 30% in addition to the shelf price as a customer would view it.

Same tax amount either way it is expessed, same amount goes to government and the retailer either way.

Like today, spend your entire paycheck, how much more in income tax did you have to pay to even spend anything at all.

[Smokin' Joe]

So the customer is paying $100 for a $70 item? What's the difference?

30 dollars of tax on a 70 dollar item is 42%, not 37%