So the Hooker is not avoiding paying Sales Tax by pocketing the full $130 she charges???? I fail to see how anyone can not comprehend this. It doesn't matter what she does with the money in the future, she has cheated the system and you have not increased you base to capture this part of the economy. You analysis is fraudulant.
Nobody (except you) is saying that illegal transactions will have tax collected and remitted. Unless they're really dumb, they won't do that and disclose their illegal activities. They will, however, eventually spend the money and have it taxed. If, by some quirk, this criminal is wise with his money, he may save and invest his money - which is a situation similar to never having received the money.
I don't know why you think this is such a travesty. Nobody's lying.
THe original question to which I responded is above. IE how hr 25 will capture more taxes from a drug lord. Remember he now pays only a portion of his tax burden. HR 25 will make it so he pays his full share.
No - it's your reasoning that's fraudulent. She isn't taxed under the FairTax until she consumes at the retail end consumption level (and only then if she purchases new, not previously taxed items).