Simply put, an item that costs $100 now under the current system would not cost $100 under the FairTax once the embedded taxes and compliance costs are removed. It would cost about $77 before taxes.
And how much would that $77 item cost after the FairTax is added? You said in post #334 that it would be $94.71. This is,
without question,
wrong. It would be $100. The rate charged at the retail counter, as clearly stated in the FairTax FAQ, is 30%.
$77 x 30% = $23.
$77 + $23 = $100.
They claim it's a 23% sales tax because $23 is 23% of $100, the price
including tax - thus, the "tax inclusive" sales tax rate.
You
have been duped. They are the only ones calculated sales tax rates this way. Your experience as an engineer is working against you. You are use to logic and reason and there is no logic or reason to a inclusive sales tax rate. It's only purpose is to confuse people.
The reason they calculate the rates the way they do is to compare it on an apples to apples basis to the taxes it will be replace, income, fica, etc... becuase those are INCLUSIVE rates.
To compare exclusive rates to inclusive rates is to attempt to dupe people with misleading and false information and arguments.