I am talking about black market dealings between private people. You must have already heard about contractors willing to do a job for cash only.
And what prevents his agrieved customer from turning him in, or his ex-wife, competition, ...
Cash only has nothing to do with an NRST in any case. The requirment is for a seller to provide the customer with a receipt for tax paid and detailed cost of services to the customer. If he wants to take the risk of losing his bonding an license to operate, (customer is at no risk) for the sake of the customer. Just means government gets less though make it up when the contractor goes out to purchase something for his own use. Doesn't worry me one bit.
My cookies at the bake sale just got (in effect) 22-30% cheaper, or do *I* have to file a tax form with the NEW IRS?
No you are not doing business for purposes of the the NRST. Read the bill:
And don't forget STATE sales taxes! Hello Underground Economy!!
You pay State Sale taxes today, as well as the embedded taxes in the price of goods and service. This does not change the situation over the current system or even the Flat Income Tax system. In fact state sales taxes would tend towards conformity with the federal sales tax system, which is encouraged in the NRST legislation by paying states to conform their tax system to the NRST way of doing things. The ultimate result would be a reduction in state tax rates as well from a broader tax base and reductions in complexity.
Another unforeseen effect of the NRST: (Isn't it only charged to the *final* user?) Used equipment just becomes that much more valuable, and the sales volume of new goods declines.
If new has a substantive value to the custome over used there will be no impact. You overlook that the customer under the NRST pays no more in total than he does today, and in fact has more available to him from which to make his purchases. There is no more incentive to purchase used under the NRST than there is right now. In fact New goods actually become more available for more money in the customer's pocket and a lower shelf price to attract him.
Aren't service providers also taxed under the NRST?
No, the customers of service providers are taxed under the NRST, service providers merely collect the tax and provide a receipt to the customer. When the business remits the tax to the state tax authority, he receives compensation for doing so.
Again read the bill:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org