Sounds great, but one awful fact is that with the implementation of a sales tax system, everyone and their brother is now entitled to social benefits. one of the biggest arguments about illegals is that they don't pay for the services they receive, Under this system, everyone is paying into the system therefore everyone should also be allowed to take.Depending on where you live and how the state setups its local ecomony/taxe this could counteract any potential increase in taxes collected. Basically every illegal could qualify for every program, unemployment, food stamps etc as they are now taxpayers. Could also be viewed as the final solidification of NAFTA. Could such a tax be added to exports to mexico thus ending the border as we know it? Not real knowledgeable on this stuff but seems like a possibility.
Okay, I see your point, but as it stands, the ones who use the social benefits currently pay NOTHING, or they actually make money with the Earned Income Credit. How is your scenario different? (Except the border thing)
Currently, it is extremely lucrative to employ illegal immigrants because they essentially work tax-free and are paid under the table. Under current law, an illegal being paid $10/hour in cash is equivalent to a legal worker being paid anywhere from $12-14/hour (15.3% in payroll taxes plus whatever the marginal tax rate is). Under the FairTax, it won’t matter; both workers would make the same because there are no taxes. And since there are penalties for hiring illegal immigrants, employers would naturally choose legal workers if there is no price difference. In addition, the illegal worker would not receive a monthly BCA because he has no Social Security number, making life in America much harder. As a result, there is a much larger incentive to migrate here legally and a large tax burden for migrating to the US illegally.