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The only way you tax unreported incomes from things like drug sales is if you can find a way to actually make drug sales part of your tax base.

Wrong. Bad wrong. Here's how the consumption tax HR 25 will capture more of taxes from say, a drug lord.

Currently, the drug lord pays a portion of his share of tax, only a portion. That would be the portion he pays when he buys something. We all know about the hidden taxes in prices.(and some of us know the tax system hides related costs). But what he pays in prices represents only a portion of his fair share. He is NOT paying payroll taxes, nor is he paying income taxes. Our tax burdens are currently in 3 places; prices, payroll taxes, income taxes.

Under the consumption tax HR 25, any individual pays his FULL tax burden when he buys stuff. So when the drug lord buys stuff, he pays his full share... not just part of it.

Under the consumption tax HR 25, any individual pays his FULL tax burden when he buys stuff. So when the drug lord buys stuff, he pays his full share... not just part of it.

But the people buying from him won't be paying any tax on that money, income or sales tax. Think of it this way. The income tax gets the money going into the underground market, the sales tax get the money going out.

[Actually, the FairTax may be worse at collecting taxes from the underground market because we import much of the goods they sell (drugs). The money to pay for those drugs is earned here, but much of it isn't spent here.]

Under the consumption tax HR 25, any individual pays his FULL tax burden when he buys stuff. So when the drug lord buys stuff, he pays his full share... not just part of it

But he DOES NOT pay his FULL SHARE when he sells illegal stuff. No tax is remitted. Tax is avoided. Just like today. Absolutely ZERO difference and you know it.