But the drug dealer is still collecting a gross amount and not paying tax on it. Technically you are correct, it is not the drug dealer avoiding the tax, but the drug user. But either way, there was still $150,000 of sales tax not paid. Whether it be the income tax to the drug dealer, or sales tax to the drug user, both systems has similar tax avoidance for illegal transaction.
This sentence shows that you just can't imagine a world without an income tax.
Fact is, NO ONE will pay such a tax on ANYTHING.
You're like the institutionalized prisoner who has been locked up for so long that he doesn't want to leave the prison-house, even when the door is left hanging wide open.
The $150,000 in purchases that go untaxed are untaxed in both tax systems. That is not a change.
What makes the nrst capture more (not all) is that there will be more tax money taken from the drug dealer. Under income tax, he only paid 1 of 3 components of his tax burden - embedded taxes in prices - he does not pay income or payroll tax. But under the nrst, the drug dealer will pay all his full tax burden in purchases. THat's the increase.
Good grief man, how many times can he explain it to you?
I'll type real slow so you can keep up.
1. As of now, under the current system: Drug dealer pays zero, zip, nada ($0.00) in federal income taxes. And collects zero, zip, nada in state sales taxes. He gets to keep the full $150K and pay a paltry (depending on state) 6% or so on purchases in state sales taxes.
2. Under the proposed tax plan: Drug dealer still doesn't collect state sales tax on the $150K in drugs he sold, and won't collect the federal NRST either; BUT, he will pay the NRST on that shiny new Caddy with the $1000.00 set of gold spinner rims and the $1000.00 sound system with the giant sub woofer in the trunk, and all those gold chains, and all the chemicals he uses to make his crack or meth or whatever. NOt to mention all the other stuff he'll buy. That IS a net gain to government that government is NOT getting now.
The drug users; the buyer of said drugs; He'll still be paying NRST too, as will you and I, on other legal products and services (just like the dealer). The way I see it, the NRST would level the playing field with regard to the tax burden, and will open up the eyes of the public to government spending. Power will/should shift from the fedgov back to the people where it belongs.
How much money does it cost the economy to comply with the current Rube Goldberg tax system we have now? That alone is worth the price of admission in my mind.