Tell me how they would prevent tax fraud with the fair tax? Wouldn't it be a heck of a lot easier to hide your purchases than your income? The whole nation will become a bartering nation and the level of retail purchases will fade into oblivion. Someone educate me here.
What exactly would be wrong with the picture you paint? Are we not entitled to use our property as we see fit?
No, it would be harder to hide your tax liability with the Fair Tax, because anyone wishing to do so would have to obtain the collaboration of the seller (who is liable for the sales tax and must file the return). Right now, falsification of tax returns may be done by the taxpayer alone. The "cash economy" now estimated to be $40 billion per year or more, and the Fair Tax should be able to capture most or all of that. Some small retailers will try to bootleg sales, but that will be risky and their chance of being caught is greater than under the present system.
Sounds good to me. :)
Tell me how they would prevent tax fraud with the fair tax?
How do they prevent small businesses and selfemployed from defrauding the system now. State tax authorities would administer the law just as they do now.
One significant factor however is that the maximum marginal tax rates on the current income/payroll tax system is over 40% providing significant incentive to hide income, not file, and evade those taxes today.
Under HR25 the maximum marginal tax rate would be approximately half that.
Another is that there are fewer filers (apprx 16million) engaged in retail sales as opposed to the current 160million or so filers. Enforcement efforts would be more concentrated raising the risk of detection.
read ===> Tax Evasion: The Underground Economy
The whole nation will become a bartering nation and the level of retail purchases will fade into oblivion. Someone educate me here.
Between less incentive and higher risk of being caught, there is no reason to believe that tax evasion would be any greater than it is under the current system with its cash underground economy and illegal trade.