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Today, the drug dealer only pays a portion of his tax burden, the part embedded in prices (he pays none of his income tax nor any of his FICA.)

Which brings up a point. I haven't been following this thread to any great degree so if you guys have addressed this earlier, my apologies. Under the NRST, how do we determine SS benefits? Currently, the benefits accrue based on money paid in from earned income. A drug dealer who reports no earned income has accumulated no SS benefits. Under a NRST he/she will be entitled. How will it be determined?

Under the NRST, how do we determine SS benefits?

By reporting wage income to the Social Security Administration, as is required under the Title II of the Social Security Act.

Currently, the benefits accrue based on money paid in from earned income.

Strictly speaking they don't, they accrue on the basis of reporting of wages only, not by taxes paid.

The tax that is collected actually is paid into general revenues, from which is made an annual appropriation for Social Security Accounting under 42 USC 401 on the basis of total reported wagebase.

Specifically benefits are based on reported wages for the individual however.

A drug dealer who reports no earned income has accumulated no SS benefits.

Under a NRST he/she will be entitled.

Only if they have an SSN & report wages or "self-employment?" earnings to the Social Security Administration.

Wage earnings are reported to SSA by employers, or by self-employment reports to the SSA for benefits purposes.

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

`CHAPTER 9--ADDITIONAL MATTERS

`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.

`(a) In General- Employers shall submit such information to the Social Security Administration as is required by the Social Security Administration to calculate Social Security benefits under title II of the Social Security Act, including wages paid, in a form prescribed by the Secretary. A copy of the employer submission to the Social Security Administration relating to each employee shall be provided to each employee by the employer.

`(b) Wages- For purposes of this section, the term `wages' means all cash remuneration for employment (including tips to an employee by third parties provided that the employer or employee maintains records documenting such tips) including self-employment income; except that such term shall not include--

`(1) any insurance benefits received (including death benefits);
`(2) pension or annuity benefits received;
`(3) tips received by an employee over $5,000 per year; and
`(4) benefits received under a government entitlement program (including Social Security benefits and unemployment compensation benefits).

`(c) Self-Employment Income- For purposes of subsection (b), the term `self-employment income' means gross payments received for taxable property or services minus the sum of--

`(1) gross payments made for taxable property or services (without regard to whether tax was paid pursuant to section 101 on such taxable property or services), and
`(2) wages paid by the self-employed person to employees of the self-employed person.

wages (not income) will be reported to ssn to determine benefits - of course, if you don't report - and i dunno if it's req'd, you'd obviously wouldn't get as much ss at retirement as if you'd reported...