I don’t believe that there will be a sizable underground economy under the FairTax, which is what I said in my first paragraph.
As to tracking individual purchases, that simply will not happen! I cannot imagine how you or anyone else can conjure up a scenario where an individual consumer would even come into contact with a tax collector, either state or federal.
The FairTax is set up to be an extension of the state sales taxes, and completely isolates the consumer FRom the tax collector. That is one of the features of the FairTax.
Federal tax collectors will only work with the states to ensure that each state collects and remits the proper amount of taxes.
In fact, there is another feature: businesses and states will be paid to collect the FairTax so as to cover their cost of collection. FairTax is not an unfunded mandate like the income tax is.
If I run a small business, and I do $500,000 in business, my customers pay the FairtTax, and I remit that to the state, which remits some to the feds -- or something like that, right?
What if I tell the state that my business did -- **cough** -- $300,000 in business? Is there a mechanism whereby a tax collector can say, "hold on there, matey --!"
You don't think people will try to evade a 40% markup with State sales taxes on top (In California it's pushing 9%)?
I see. You don't.
As to tracking individual purchases, that simply will not happen!
Yes, it will. It already does in California, where all sorts of goods are tracked by driver's license numbers (see "Real ID"). The software is in place. It's scalable too.
I cannot imagine how you or anyone else can conjure up a scenario where an individual consumer would even come into contact with a tax collector, either state or federal.
You lack imagination.
The FairTax is set up to be an extension of the state sales taxes, and completely isolates the consumer FRom the tax collector. That is one of the features of the FairTax.
If you think for one second that databases will not be shared what with the Utah Data Center already in place storing virtually EVERYTHING on the Internet, you're dumber than I think you are.
In fact, there is another feature: businesses and states will be paid to collect the FairTax so as to cover their cost of collection. FairTax is not an unfunded mandate like the income tax is.
And the information will be for sale. If you think Google is intrusive now, just wait.
Tell you what, since you are so sure that won't happen, go ahead and have added to the legilation that if any individual consumer is ever audited under the "fair" tax, all of your and your family's assets will be immediately forfeit to the person audited. When you are ready to back up that claim under threat of impoverishment of you and yours, then I might buy into this scheme. Until then, it's just that much smoke being piped up our asses.