The FairTax, Join in!

[Eomund]

Don't get confused by trying to align the 22% vs. the 23% as that is not the issue. The overall issue you are concerned with is revenue neutral, yes?

Yes your math adds up too. But you did not see that the total tax collected was $2.6 Trillion. To hit 2.6 Trillion FairTax dollars collected, the US economy would have to move New Goods and Services (in other words taxable sales) in total of $11.3 Trillion to be revenue neutral.

So the economy needs to hit $11.3 Trillion in taxable sales and services. I was just looking at the 2006 GDP report, and from just a glance (and not too much research on the GDP numbers themselves) PCE, or Personal Consumption Expenditures, are at 9,224.5 Billion. Now add the Government Consumption Expenditures & Gross Investment, at 2,523 billion, and you get a total of 11.75 Trillion in Expenditures. So the argument that the FairTax is revenue neutral has some claim to it. The total GDP for 2006 was 13,194.7 Billion.
(Source: http://www.bea.gov/national/nipaweb/TableView.asp#Mid)

Now once again to restate my point, 11.3 trillion dollars of taxable goods and services need to be sold to reach revenue neutral status, which is what your larger point is. GDP as I currently (admittedly I haven't studied it) is made up of several items (PCE, GDPI, Net Exports, and GCE & Gross Investment). Not all will be taxable, and I understand that. It does look like if you combine the expenditures of private and government you would hit that revenue neutral amount of $11.3 trillion.

I hope this makes sense and that I understood this correctly.