[Sprite518]

Ok let me keep it simple for you. 77 times .23 = 17.71

Therefore, $17.71 is 23% of $77. So the product total would be 77 + 17.71 = $94.71 and not 100. LOL!

First off this guy is assuming prices would not go down. Guess what they would, and you know why? Because the buyer is the ONLY person that pays the tax on a VOLUNTEER basis. Its not like the current progressive tax or Flat tax. If the fair tax was ever passed, then you would see states change their tax codes too in order to stay competitive.

[expatpat]

Don't post your quibbling to me. I was quoting pigdog's post 749, so please argue with him, instead.

[pigdog]

What I had posed to him, of course, was that if you paid $100 for a thing, then the tax was $23 and the thing itself was $77.

That's not what he posed to you. Do you suppose that was just a slip of his tongue?

[Always Right]

Therefore, $17.71 is 23% of $77. So the product total would be 77 + 17.71 = $94.71 and not 100. LOL!

You still don't get it. Here is the explaination from the FairTax web site:

I know the FairTax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter? 30 percent. This issue is often confusing, so we explain more here.

When income tax rates are quoted, economists call that a tax-inclusive quote: “I paid 23 percent last year.” If that were the case, for $100 one earned, $23 went to Uncle Sam. Or, “I had to make $130 to have $100 to spend.” That’s a 23-percent tax-inclusive rate.

We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.

Sales taxes, on the other hand, are generally quoted tax-exclusive: “I bought a $77 shirt and had to pay that same $23 in sales tax. This is a 30-percent sales tax.” Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.” This rate, when programmed into a point-of-purchase terminal, is 30 percent.

Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.

Spend that same $100 under a sales tax, you pay that same $30, and the rate is quoted as 30 percent.

Perhaps the biggest difference between the two is under the income tax, controlling the amount of tax you pay is a complex nightmare. Under the FairTax, you may simply choose not to spend, or to spend less.


Figure 4: 23 percent tax-iunclusive vs. 30 percent tax-exclusive