[Principled]

Oh yeah- and when the tax is on spending instead of earnings, how will capturing that previously mysterious (untaxed) 20% affect collections?

Could some of it be the illegal economy?

[lucysmom]

How would you reconcile the fact that the IRS shows 20% less in earnings than we spend in the aggregate?

From the tax panel report For the portion of income from which taxes are not withheld and there is no third-party reporting, income tax evasion rates are estimated to be around 50 percent.

The FairTax makes ALL tax collection points self reporting.