Federal Taxes That Must Be Raised / GDP
Tax base / GDP
The problem with that equation is that it assumes 100% compliance. That assumption alone causes the NRST to underestimate the neccessary rate by at least 15%.
And the problem with you is you have an agenda and that agenda is that you think your business will go belly up with a 23% sales tax on the new houses you build. That is a very legitimate concern and I respect it. I ask you one very simple question: Do you sell more houses when the economy is good or when the economy is bad? I am a Neal Boortz listener for 35 years (yeah, I know it gets old) and I have heard more than one builder come on his show and support the fair tax. If the fair tax makes the economy soar I should think that your business will too. Think it through. Manufacturers have stated that they would relocate to the US if they could avoid taxes (which they could do under the HR25). Who's going to build all the houses for their executives and their employees? I don't pretend to know your business but I do pretend to understand expansionary economics.
The problem with that equation is that it assumes 100% compliance. That assumption alone causes the NRST to underestimate the neccessary rate by at least 15%.
Wrong, the NIPA:GDP measures only reported income and retail sales. It does not track unreported hence tax evasion in the underground economy. As a consequence the taxbase defined with GDP data is smaller by the amount of evasion and other unreported sales going on in the country.
The tax rate thus determined is compensated automatically for the existant rate of evasion and non-reporting that currently exists.