YN is absolutely correct. Unless you have prostitutes and drug dealers collect and remit sales tax for their goods and services, that economic activity is untaxed under both systems. It is not a matter of what anyone thinks, it is a fact. Under the current tax system, the prostitute illegally avoids the income tax she owes. Under the NRST, the prostitude illegal avoids collecting and paying sales tax. Depending on the income bracket she is in, she quite probably will actually be avoiding more tax under the NRST system. Both system only capture this money once it is brought into legal economic activity.
YN is absolutely correct. Unless you have prostitutes and drug dealers collect and remit sales tax for their goods and services, that economic activity is untaxed under both systems. It is not a matter of what anyone thinks, it is a fact. Under the current tax system, the prostitute illegally avoids the income tax she owes. Under the NRST, the prostitude illegal avoids collecting and paying sales tax. Depending on the income bracket she is in, she quite probably will actually be avoiding more tax under the NRST system. Both system only capture this money once it is brought into legal economic activity.In thinking about it, the FairTax may actually be much worse than the current system at capturing illegal drug money. The vast majority of illegal drugs are imported. We have a "trade deficit" in illegal drugs. So there is a lot of legal income flowing into the domestic drug market and then flowing out of the country, not to be spent on domestic consumption. The current system taxes than money before it gets into the drug market and it has a chance to leave the country (unspent).
Both you and YN are absolutely WRONG! Under the the NRST the proceeds of those sales will eventually be spent, just as they are today, the only difference being that under the NRST that spending is taxed were it isn't today under the income tax.