“The reason the FairTax people use the inclusive rate of 23% is that it replaces an inclusive tax rate. Currently, income tax is scored as an inclusive tax rate. For example, the 25% tax bracket implies that 25% of gross earnings is tax, leaving the wage earner with 75%. The FairTax people simply want to be consistent in the manner in which the two systems are portrayed. If you inclusively look at your income tax as a percentage of gross earnings, then let’s also look at the FairTax as a percentage of gross spending. Hence the $30 is 23% of the gross amount spent.”
Adakin Valorem” offers a point-by-point rebuttal of Max Sawicky’s criticism of the proposed tax.