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To: phil_will1; pigdog
phil_will1 wrote:
And I believe that you miss the point as it relates to illegal labor. There is a huge and growing sector of our economy in this category. According to a recent Bear Stearns report, the illegal immigrant population may be double previous estimates of 10 million. Many of these people pay no withholding, Social Security or other types of income based taxes. Under the FairTax, they would pay at the cash register, but would not get the rebate. They would therefore be paying taxes at a rate that is disproportionate to the rest of us.

Under the current system, the only taxes they pay are the indirect ones imbedded in their consumption items. However, legal residents pay those, also. Illegals therefore, in many cases, pay disproportionately LESS that their legal counterparts do.


Are you talking about illegal aliens who operate as independent contractors and don't pay income taxes or self employment taxes?

I'm sure when the alleged "fair tax" becomes law, these illegals will go right out and apply for a taxpayer ID so they can collect sales tax on the taxable services they sell and remit the sales tax on those sales to the state. Or they could just continue to operate illegally and not report their sales of taxable services and evade the alleged "fair tax" just like they evade the income tax today.

Isn't it far more likely that the same income that evades taxation now will be for taxable services that won't be reported or taxed under the fair tax?

I'm also highly skeptical of your claim that they won't get rebate checks.

pigdog wrote:
In any event the FairTax captures tax revenue from he underground economy even if it gets it only from the hooker and not the John. Half a loaf you know.
Isn't that the same half loaf that gets collected now through hidden taxes embedded in the price of everything the hooker buys?

By definition, the "underground economy" doesn't pay taxes. It doesn't pay income taxes, and it won't pay any "fair tax" under your proposed system. The alleged "fair tax" changes who is breaking the tax law and who the evader(s) are. It also changes who is paying actual taxes on each side of the illegal transaction. But, it doesn't eliminate the tax evasion. And it won't collect significantly more revenue from the "underground economy" than the current system.

Your arguments are just exaggerations and made to play to people's jealosy and/or disdain for current tax evaders. You conveniently leave out the new tax evaders in the "fair tax" environment. That's hurts your credibity. It's either ignorance or a deliberate attempt to mislead (and it's been pointed out enough times over the years that I doubt it's ignorance).

825 posted on 05/20/2005 1:05:26 PM PDT by cc2k
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To: cc2k

"I'm sure when the alleged 'fair tax' becomes law, these illegals will go right out and apply for a taxpayer ID so they can collect sales tax on the taxable services they sell and remit the sales tax on those sales to the state. Or they could just continue to operate illegally and not report their sales of taxable services and evade the alleged 'fair tax' just like they evade the income tax today."

I think that you are missing a very critical factor in evaluating rates of compliance. The FairTax represents an enormous simplification, as measured by the number of pages in the two systems, as well as the number of points of collection/enforcement. The increased efficiency will be enormous. Therefore, if we have to allocate some resources to minimize the types of abuses that concern you so much, that will be quite possible.

No matter how you slice and dice it, it will be inevitable that we will get much higher compliance with a much lower level of resources allocated to enforcement. It isn't even close.


827 posted on 05/20/2005 1:23:33 PM PDT by phil_will1
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To: cc2k

You should read the bill re prebate checks where it says:

"`(2) IDENTIFICATION REQUIREMENTS- In order for a person to be counted as a member of the family for purposes of determining the size of the qualified family, such person must--

`(A) have a bona fide Social Security number; and

`(B) be a lawful resident of the United States."

What portion would you think would qualify? Or all they all just going to fake it and fool old Uncle???

And, no, the amount paid in IT now would be a good bit less that the sales tax. And, to repeat, the statement is NOT that the FairTax eliminates tax evasion but that if DOES collect tax revenues from many who are now not paying. Significantly more??? It will pick up 23% of each retail sale to end consumers on taxable items whether they are illegal aliens, drug dealers, or foreign tourists - not many of whom are impacted with IT now. Clearly very significant I think.

I suppose I should point out the obvious that, since it is not yet he law, there are no tax evaders yet under the FairTax - nor have I said there would not be. Certainly there are provisions in the bill to address some of the evaders/non-compliers.


829 posted on 05/20/2005 1:43:59 PM PDT by pigdog
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To: cc2k

"I'm sure when the alleged 'fair tax' becomes law, these illegals will go right out and apply for a taxpayer ID so they can collect sales tax on the taxable services they sell and remit the sales tax on those sales to the state. Or they could just continue to operate illegally and not report their sales of taxable services and evade the alleged 'fair tax' just like they evade the income tax today."

For the benefit of others on the thread, let me elaborate. Most of the illegal labor is being done on behalf of businesses, which will not be taxable under the FairTax. For example, construction work and agricultural work is not sold to the end using consumer, but to subcontractors and ag producers. Therefore, those services will not be taxable under the FairTax. Those providing the services will, however, pay sales taxes at the checkout counter and they will not get the benefit of the rebate. That is a net gain any way you want to spin it.

"I'm also highly skeptical of your claim that they won't get rebate checks."

That doesn't surpise me in the least. You seem to be "highly skeptical" of any of the FairTax's economic benefits. Should those who funded the research that went into the FairTax's development conduct additional research to identify benefits that you would not be "highly skeptical" of? I think not. It is undoubtedly easier and more effective to simply explain the proposal to more open-minded Americans.


913 posted on 05/22/2005 10:39:30 AM PDT by phil_will1
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