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To: kevkrom
No, what you need to provide is any sort of resource that says that evasion will be higher under the sales tax than under the income tax.
No, because the income tax base and rates already have the evasion factored into them. The point is not that there would be more or less evasion/avoidance under the FairTax than the income tax, it's that there would be an increase in evasion/avoidance compared to the current state sales taxes and other goods and services in the FairTax base. It's this increase in sales tax evasion/avoidance that was not accounted for when the rate was calculated. Increase the sales tax rate from 6% to 36% and the sales tax base will definitely shrink due to evasion/avoidance.
627 posted on 01/31/2005 12:49:13 PM PST by Your Nightmare
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To: Your Nightmare
No, because the income tax base and rates already have the evasion factored into them. The point is not that there would be more or less evasion/avoidance under the FairTax than the income tax, it's that there would be an increase in evasion/avoidance compared to the current state sales taxes and other goods and services in the FairTax base.

Nonsense. The FairTax base is on GDP, which excludes activity not reported (income and current sales tax evasion), not on the income tax base.

Current income taxes take in 17.6% of GDP (scary, but that's the fact). To be revenue-neutral using a static analysis (welcome to the wonderful world of the CBO), the NRST would have to take in 17.6% of GDP.

The only way your argument makes sense is if you can show that total evasion would increase. But you can't, so you put up the strawman of just sales tax evasion increasing.

644 posted on 01/31/2005 1:27:28 PM PST by kevkrom (If people are free to do as they wish, they are almost certain not to do as Utopian planners wish)
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