[Jay777]

How would it tax the black market?

[Jay777]

And also...I'm still wondering how the price of the products we buy would not increase?

[nh1]

It would be impossible to tax the black market, but all those working illegally or under the table would now pay taxes.

Drug dealers would pay taxes.

Contractors who work under the table would pay taxes.

Illegal immigrants would pay taxes.

Overall, all of the people who would be paying taxes, who now avoid it, will greatly outweigh the effect of a black market.

[Oberon]

How would it tax the black market?

Let's say Homey sells drugs in the projects...a LOT of drugs in the projects. Let's say Homey wants a ride with some bling-bling, if you know what I mean.

Homey goes down to the Jaguar dealership and pays for his new XK-8 with a sack full of cocaine-tainted Ben Franklins; but wait! He gotta pay tax on it too! That's okay. He got another roll of Franklins in his back pocket.

See how that works?

[OHelix]

"How would it tax the black market?"

Consider this: If you make your money selling drugs on the black market right now, you don't report the income and you therefore don't pay any federal income tax on it... but when you spend that money, for example, on a car, or on pair of jeans, or dinner out, chances are you are paying state income tax on those purchases, even though you never reported the income.