You must have missed my post at 171.You must have missed my reply. Illegal immigrants would probably pay more, although you seem to think they would pay the same price and that the "embedded tax" they were previously paying would just be visible. Do you still believe that?
"Illegal immigrants would probably pay more, although you seem to think they would pay the same price and that the "embedded tax" they were previously paying would just be visible. Do you still believe that?"
Only to the extent that they purchase goods which are produced in the USA. As I have posted many, many times before, imports will increase in after-tax pricing as we eliminate the preference the current tax system provides to foreign producers.
"As I have demonstrated before, illegal activity is a wash. In the example of the drug dealer, the dealer would be paying taxes on the transaction but the buyer would not be paying taxes on his income, ie. a wash."
Oh! YN has demonstrated it before! I almost forgot that noone is allowed to disagree with YN and post anything contrary to his previously posted positions!
There are two questions with respect to the illegal activites and how they would be treated under differing tax systems.
1. What happens to the incidence (i. e. who pays and who doesn't)
2. What is the net effect on total revenue.
The question that you posed and that I answered relates to #1. You are now very cleverly trying to insert your version of the answer to #2 into the debate and convince others that it negates my answer to #1. I will stand by my initial response - drug dealers, prostitutes and illegal laborers would be paying more under the FairTax than under the current system.
If you want to debate the net revenue impact, we can do that sometime when I have more time but please let's not deliberately try to confuse others on the thread by mixing the two.
"As to those "those taking advantage of the many loopholes in the current system to lower their tax burden well below what the 'progressive' nature of the current system suggests is the objective" you'll have to give me an example because that could be anyone but I would bet the majority of them (in numbers) are middle class people like me."
Ok, here are a couple of examples that come to mind.
1. Ted Turner - tax returns entered into the public record during his divorce from Jane Fonda several years ago revealed that on an income of somethng like $125 MM for a recent tax year, he paid about $5 MM in taxes - a rate of less than 5%.
2. I have a client in the real estate development business who will remain unnamed. This man lives in a $3.1 MM home with no mortgage, drives a new Mercedes sports car and has a net worth in excess of $150MM. His tax returns show 7 figure losses for the past few years. I can assure you that he isn't losing money on his business ventures.
Teresa Heinz Kerry is another possibility, with her reported 12% tax rate. That really depends on how much she spends on consumption, however, so I left her out.
-- The Drug Dealer would most likely pass on the NRST to the buyer in the form of more expensive drugs. So, the NRST would in effect be applied to illegal substances! On top of that, drug use tends to go down when prices are high, another benefit!
-- Less foreign visitors and tourists would be MORE THAN OFFSET by increased foreign investment dollars.
-- More Americans going overseas would be MORE THAN OFFSET by the 1/2 TRILLION+ that US corporations have stashed overseas to avoid taxation as well as US investment dollars coming back home.