After the NRST, how much tax is avoided? I say 30%.
My point being, whatever the exact numbers, there is an increased incentive to cheat. Has this been taken into consideration with the 23% number? I don't think so.
The "it's full of faults" Brookings study does, and I believe it to be more realistic in its assumptions.
Thanks -- that clears it up for me. I'm still not sure exlcuding the self-employed payroll tax is correct, but it's been a long time since I had to file that way, so I forget the particulars.
The "it's full of faults" Brookings study does,
Brookings is really and unbiased source you have there LOL.
Surely you allow the co-authors of the Fair Tax Act rebuttal time.
PDF: Rebuttal of the William Gale papers
by David Burton & Dan Mastromarco
The Argus Group
As far as the situation as regards the potential for evasion goes, what you are overlooking is the same ones evading the income tax, will undoubtedly be invovled in avoiding collecting and remitting NRST.
However, whenever they purchase retail goods and services using their business certification they will be under scrutiny by virture of identifying themselves to the state sales tax agencies administrating the NRST and charged with auditing business accounts.
For all other purchases, they end up paying the same NRST as anyone else. The risk of evasion in the manner you suggest under the NRST is much greater than under the current system where all that is required to not file and stick with cash transactions to sucessfully avoid detection and evade the tax.
A solid discussion of the issues of evasion as compared to the income/payroll tax system can be found here:
In your example at a 15% tax rate, I expect it would be more incentive under the FairTax. However, it would not be as much as you presented in your example, because you compared the 15% income tax rate with the 30% Fairtax rate. The acurate comparison would be the 23% rate.