Inclusive vs. Exclusive Taxation


$10 label price + $1 sales tax = $11 total price.

This is an example of Exclusive Taxing, which is how our current sales tax is tabulated.

$11 income – $1.10 income tax = $10 net earnings.

This is an example of Inclusive Taxing, which is how most of our current taxes–including income tax and Medicare/Social Security withholdings– are tabulated.

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