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It would be easier to cheat

It is easier to cheat with the current tax system. Considering as a percentage of gross domestic product (GDP), tax evasion is beyond 2.0 percent, compared to 1.6 percent in 1991. Tax evasion continues to be in the range of one quarter of income taxes collected. Almost 40 percent of the public, according to the IRS, is out of compliance with the present tax system, mostly unintentionally due to the enormous complexity of the present system. These IRS figures do not include taxes lost on illegal sources of income with a criminal economy estimated at a trillion dollars. All this, despite a major enforcement effort and assessment of tens of millions of civil penalties on American taxpayers in an effort to force compliance with the tax system.

The Fair Tax reduces rather than increases the problem of tax evasion. The increased fairness, transparency, and legitimacy of the system will induce more compliance. The roughly 90-percent reduction in filers enables tax administrators more narrowly and effectively to address non-compliance and increases the likelihood of tax evasion discovery. The relative simplicity of the Fair Tax promotes compliance. Businesses need answer only one question to determine the tax due: How much was sold to consumers? Finally, because tax rates decrease, tax evasion is less profitable; and because of the dramatic reduction in the number of tax filers, tax evaders will be more easily monitored and caught under the Fair Tax system.

Importers flooding flea markets from across the open borders. No individual audits, no requirement to produce a worthless receipt for proof of purchase/tax paid and every crook and crooked business knows it.

The audits would occur when a purchase is made and documented with the items and tax itemized on the receipt just as it is currently.

Add to that the phoney rebates to every household in the country with a SS# (and we know there aren't any phoney SS#'s out there).

There will be phoney SS#s in any tax system. The monthly rebates won't be phoney once people start receiving rebate checks.

>Then add 50 different tax administrators and you have major problems."The current national sales tax proposal suggests that the states should administer the tax because of their previous experience administering a sales tax. Just because a state has experience, does not mean that it is good at what it does. There are states that are great administrators and states that are very poor.

There will not necessarily be 50 different tax administrators. A state can choose not to collect the federal sales tax, and either outsource the collection to another state, or opt to have the federal government collect it directly.

The Fair Tax reduces rather than increases the problem of tax evasion.Emancipating America from the Income Tax:
How a National Sales Tax Would Work
by David R. Burton and Dan R. Mastromarco

Putting together the information in Tables 1 and 2, we discover that an NST with no rebate could collect the same amount of revenue ($803 billion) as the current income tax regime with a tax inclusive rate of 11.8 percent, as shown in Table 3. This tax inclusive rate with a rebate to fully protect the poor from the tax (as discussed below) would bring the rate to 14.2 percent. Throughout this study we use a rate of 15 percent, which would offset any losses from tax avoidance beyond the amount that occurs with the current income tax.

Why is that?