Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Principled
How about I spend $67,596 and of those dollars spent, $15,547 was used to pay federal taxes. What rate is that? Let's see, tax divided by total spent is .23 or 23%. Is that deceptive?

When does a person ever add up all their expendatures and figure out how much sales tax they've paid. Never. The only time they ever figure sales tax is when they are shopping and figure the tax based on the retail price. Something that is much harder to do with a tax-inclusive rate.
75 posted on 04/23/2004 1:11:55 PM PDT by Your Nightmare
[ Post Reply | Private Reply | To 74 | View Replies ]


To: Your Nightmare
The only time they ever figure sales tax is when they are shopping and figure the tax based on the retail price.

Right! (finger on nose! bells ringing!)

This is the question many people have... if they don't understand income and payroll tax rates, they won't understand the nrst rate - they'll simply want to compute the nrst tax using the "add-on method"... which is NOT the way you figure income tax. It is, however the way state and local sales taxes are figured. Hence it makes sense to want to do this. It's a natural question - how to figure the amount of tax.

You can figure the rate in more than one way. Just like you can measure a stick in meters or inches. Is meters deceptive? Some folks may prefer meters, others may prefer inches. Irrespective of the units, the distance is the same.

If you want to describe the nrst tax rate and compare to the income and payroll tax rates you pay, then use tax inclusive (tax divided by total spent including the tax)...because that's how income and payroll tax rates are expressed. That rate is 23%. That's a no brainer.

If you want to figure how much an item will cost after the nrst is ADDED on, then of course use the ADD ON rate. THat rate is 29.9%.

There is an honest question in there - some people use the phrase "sales tax" and default to "add this percent to the price". That's fine. THey can use the 29.9%.

Others want to compare what they'll be paying under an nrst to what they're paying now. That's fine too. They can use the 23%.

Obviously the $ amount of tax is the same - just a different measuring stick.

So what's the beef? Do you call people deceptive for using inches instead of feet? The distance is the same, just different units....

77 posted on 04/23/2004 1:34:52 PM PDT by Principled
[ Post Reply | Private Reply | To 75 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson