[Bigun]

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.

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.

[Always Right]

the only difference being that under the NRST that spending is taxed were it isn't today under the income tax.

But under the current system all the taxes are embedded into the cost of goods anyways, so it still gets taxed once the prostitute spends her money. Under both systems, legal transactions result in taxes eventually getting paid, and illegal transactions do not result in taxes getting paid until that money is spent on something legal. It is basically a wash and I have never understood why NRST folks don't get it. It is not really a debatable point.

[Your Nightmare]

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.

Boy, you don't get it, do you? Let me try to explain.


Under the current system:

Person makes $100. Gets taxed 25%, or $25, and spends $75 on drugs. $25 is collected in taxes.

Under the FairTax:

Person makes $100 and pays no income tax and spends all $100 (prices go up) on drugs. The drug dealer take that $100 and buys some new bling-bling and pays 25% inclusive NRST, or $25 - the same amount as was collect under the current system.

And this assumes some of that $100 doesn't go to Columbia to buy more "stock."