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.
I never said it wasn't possible,What about all that "apples to apples" stuff?
That is what I gave you.No it isn't. You changed their consumption level. How is that a fair comparison of an income tax vs a consumption tax?
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?),
Because this discussion wasn't about how much prices would drop. It was about whether or not using the inclusive sales tax rate was nessesary to make a comparision to the income tax. It isn't. In fact it makes it harder. Reinforcing my belief that the use of the much less understood tax inclusive sales tax rate is only because it's a smaller number. It's just deceptive marketing.
We could talk all day about the issue of "embedded taxes" and how much they affect prices. It won't get us anywhere. It's all speculation.
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.But you didn't show me the equation with the tax inclusive rate. That's because you have to use the tax exclusive sales tax rate before you can figure out what portion of your income is going to taxes (the tax inclusive income tax). There still is no reason to use the tax inclusive sales tax rate except to confuse people. (I would say that is the main intent, no one has been able to show me why the inclusive rate is important, which means it's not unintentional confusion, but outright deception.)
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.Again, we weren't really discussing the final percentage, just how you get there. But to totally accurate you would have to factor out state and local sales taxes before you reduced the prices and factor them back in after. You would also have to ask if the 20-25% drop is a drop in retail prices or a drop in manufaturing cost and factor that into your price drops. (example: $80 manufacturer cost + $20 profit = $100 retail price. $60 reduced manufaturer cost + $20 profit = $80. A 25% drop in manufacturing costs only equals a 20% drop retail price cost.) But we could go on like this for days.
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.
But then we get into how much prices might drop and if the 29.87% would generate enough revenue for the government. Both of which are as suspect as the need to use the tax inclusive sales tax rate.
Anyway, back on topic, it seems you weren't able to show me a comparison between my income tax rate and the tax inclusive sales tax rate after all.