Your "save max" still assumes a consistent expenditure rate, not a consistent consumption rate. You say "They will purchase approximately the same amount of stuff with $77,500 since prices would fall 20-25% under competition." You're making an assumption that prices falling and the sales tax will be a wash. You can't do that, you have to factor in the falling prices into your equation. (As it turns out, a 20% price reduction is not a wash. Tax inclusive prices go up.)
Here it is with a theoretical 20% drop in prices:
NRSTrate = (($77,500 * 80%) * 29.87%) - $4,646 / $104,626 = 13.26%
Now looky there. I made an accurate comparison of the effects of the income tax vs. the NRST using the tax exclusive sales tax rate. How is that possible?
Here it is with a theoretical 20% drop in prices:
NRSTrate = (($77,500 * 80%) * 29.87%) - $4,646 / $104,626 = 13.26%
Now looky there. I made an accurate comparison of the effects of the income tax vs. the NRST using the tax exclusive sales tax rate.
How is that possible?
I never said it wasn't possible,
You asked and I quote:
Compare that to 23% sales tax and show my the computations to make the comparison.
That is what I gave you.
I notice you had to convert the the gross expenditure to price and to do so you used the least price decline of all products (why not the largest or the average or all of them in a tabel?), apply the "tax exclusive" rate, and then covert to the tax inclusive NRSTrate
to compare with the tax inclusive rate ITrate.
ITrate = ITnet/GrossIncome = $35,270/$100,000 = 35.27%
Didn't you?
Which is precisely what I said had to be done to compare rates between systems of different bases. The have to be converted to the same base for comparison.
ancient_geeser #114: "To be able to add or substract or compare between the two measures you have to first convert them to the same base."
For total accuracy and completness however you failed in coverting to price. Ideally you should have chosen the range of (20-25%) that product prices may decline or their average (22.5%) for an better comparison.
Then show the computed minimum ITrate for comparison purposes.
ITrate = ITnet/GrossIncome = $35,270/$100,000 = 35.27%
However for a more complete presentation, both ITrates & NRSTrates should be calculated with high, average, and low price declines and presented in table form don't you think?
An exercise which is of debatable value when the essential message can be presented a much more compact and understandable form and whichthe calculations confirm in spades:
Under the NRST with FCA, one pays less than 23% of personal consumption in tax vs the average of greater than 23% of gross income of the income/payroll tax.
The NRST will be no worse than the current system in tax burden laid upon the individual family.
The alternative is a page filled with calulations and numbers to cause eyes to glaze over with the essential missed for complexity and verbosity.
But then we could ignore the calculations and just put up nrst worstcase results of effective taxrates for a family of three with gross income of $100,000 spending $77,000
NRSTrate = (($77,500 * 80%) * 29.87%) - $4,646 / $104,626 = 13.26% saving the rest for a idillic and pastoral retirement
Compared with the income/payroll tax system lowest rate results:
ITrate = ITnet/GrossIncome = $35,270/$100,000 = 35.27% and government get to decide who gets that idillic and pastoral retirement on your nickel.
And let folks decide which they prefer, without all the arithmetic and overstate the more modest message of NRST proponents as it can be stated for all income groups.