Sorry, the amounts that are reported into NIPA, are reported from obviously compliant sources under even the poor enforcibility of the current federal income tax system.But what does income tax compliance have to do with the NIPA expenditure numbers or the FairTax rate calculation? Answer: nothing.
The only relevance of income tax complinace would be in the services. Something I just wondered about though, are tips to waitresses subject to sales tax? It is a payment for a service to a consumer, it seems a waitress should be subject to a 30%, excuse me I mean a 29.870129% sales tax.
But what does income tax compliance have to do with the NIPA expenditure numbers or the FairTax rate calculation? Answer: nothing.
You are right because income tax non-compliance is not an issue under NRST which shares little in common with an income tax system. As a consequence the rate determined from NIPA production sales data as current evasion activity as such is not incorportate into the taxbase.
This is a really long post that is totally irrelevant (typical AG: volume over accuracy or relevance).
Let see the total information component of your response, nil. But is a nice try at deflecting the the issues involved.
The IRS compliance figures, which you base your claim that somehow an NRST will increase because of higher rates, ignore the result of complexity and bureaucratic regulatory burden imposed as a prime motivator in tax evasion. A major factor unaddressesed in you simplistic economic views of the world of taxes.
Complexity of tax system is a well documented factor of noncompliance & tax evasion in all countries that operates regardless of high rates, where compliance is both very high for some countries and very low with others with the same 20+ percent sales tax rates on their citizens, the only differences being the more complex the tax system impacting small businesses, the higher the tax avoidence and evasion found.
With tax rate, being your focus, you neglect to note the high marginal rates of the income/payroll tax system 40%+ focused on small businesses and self-employed income are much greater even than the maximum 23% marginal rates of the NRST collected from business customers. Once the pattern of evasion begins in the first increment on that next dollar earned subject to 40% under an income tax system it grows to total evasion and non filing to deter discovery. Thus 40% marginal rate is a very in relation to the much lower maximum marginal rate of 23% or less under the provision of HR25.
Whether a small business begins evasion from frustration/confusion arising from complixity and bureaucratic hijinks, or from high marginal rate on that next dollar earned. The safest route under an income tax system is for the little guy to go wholehog and fail to file altogether, relying on the cover of 130 million filers he can be sure the IRS is focused on.
That is the core of the income tax evasion problem, large businesses are too visible to not file returns, have too much to risk, and far too many third party transaction records standing as witness against them to successfully evade the taxman outright. The risks of discovery are too high for outright evasion attempts.
However, the avoidance opportunites under the income tax abound, arising from out of its complex rules and structure, factors that are eliminated wholesale in going to an NRST.
Avoidence under the NRST amounts to saving and investing income and which contributes to an expanding business infra-structure and more efficient production resulting in economic growth, and creates more income which is ultimately spent on taxed consumption. A self correcting factor compensating for tax avoidence activities under the NRST.
Bottomline in turning to an NRST, there is little basis on which to expect an increase in tax avoidence or evasion over what already exists in the current income/payroll tax system.
In going to an NRST, the citizen is empowered to make the choice of invest or spend as he will, rather than handing government the first options on rewards of his productivity. Whichever choice that citizen makes enhances first his own living standard self reliance, advances growth of economic activity and their by ultimate assures revenue for the proper functions of national government under the constitution.