The allowence is inherent in the NIPA data series used, shifts in behaviour are in method of the perpetrator and action to effectuate the evasion but not overall amounts and are reflected in the numerator (tax revenues collected) and the tax base denominator of PCE, rendering a rate commensurate with the static methodologies in current use by OMB & Treasury.You can always tell when AG doesn't know what he's talking about. He starts using big words and tortuous sentences to try and obfuscate the fact that he is full of it.
Right now I pay my income taxes (the numerator) and the computer I just bought is in the PCE (the denominator).
Ahmm, you missed the issue, Dimples is talking about the person who evades the payment of the tax under the income tax system.
As an example of ILLEGAL evasion that will alter the PCE under the FairTax:
Under the income tax system, a person uses his under-the-table wages to purchase a new laptop computer. The transaction is counted in the PCE.
There is no revenue collected on such evasion. If it were collected revenue the (numerator) would be higher. Revenue neutrality is in regards only to revenues actually collectible under a tax system.
After the income tax, I start a "business" and buy that same computer tax free.
Which was my point, such a computer purchase is not entered in PCE now, and thus not part of the denominator yielding a higher computed tax rate not a lower one. Thus the rate computed represents an upper boundry for the revenue neutral rate given equal amounts of tax evasion/avoidence incomparison with the income/payroll tax system.