With the size of the tax, there will be a black market the size of Montana, just as there already is with cigarettes and alcohol. With a black market that big, the government will become an active participant in EVERY transaction, even barter. If you don't want government intrusion, why do you want that?
Because I don't want an IRS. Nothing is perfect in this world. We should favor investments and savings. A Simple Flat Tax will be dogged by requests for deductions and exemptions. Let the states collect it. States can behave like the original intent of the Constitution.
Even if we grant that there will be a sizable underground economy (a “black market”) under the FairTax (which I don’t), the profits FRom the black market will, at some point in time, be taxed.
The existing “black market” is sizable — I have seen estimates ranging up to one trillion dollars, and ALL of that money is not taxed.
Do some research on the subject “FairTax and the underground economy” and you will come to understand that the underground economy siphons a great deal of money out of the economy under the current system.
Due to the fact that under the FairTax, all consumers are treated equally (same tax rate on purchases) one can make a credible argument that the underground economy will shrink under the FairTax.