pigdog wrote:I think you miss the point here pigdog. Always Right is pointing out that the so called "underground economy" will always be untaxed. Your flawed logic doesn't change that.
She'll pay the sales tax when she buys at retail unles you think that everyone with unreported/evaded income has retail sources that will look the other way and NOT collect and forward the sales tax
True, under the current system, it's the hooker who is evading taxes on her income. Under the so called "fair tax" system, it will be the john who evades taxes on the sale. But the fact remains that illegal activities won't be taxed under either system. You don't help your credibility by making claims that the fair tax will tax the "underground economy." By definition black market and illegal transactions don't get taxed under either system.
It makes people wonder why you have to exaggerate and distort your claims of advantages if this so called "fair tax" is really such a good deal. If it's really a good deal, it shouldn't be necessary to make up fictitious "advantages" that don't really exist.
"I think you miss the point here pigdog. Always Right is pointing out that the so called 'underground economy' will always be untaxed. Your flawed logic doesn't change that."
And I believe that you miss the point as it relates to illegal labor. There is a huge and growing sector of our economy in this category. According to a recent Bear Stearns report, the illegal immigrant population may be double previous estimates of 10 million. Many of these people pay no withholding, Social Security or other types of income based taxes. Under the FairTax, they would pay at the cash register, but would not get the rebate. They would therefore be paying taxes at a rate that is disproportionate to the rest of us.
Under the current system, the only taxes they pay are the indirect ones imbedded in their consumption items. However, legal residents pay those, also. Illegals therefore, in many cases, pay disproportionately LESS that their legal counterparts do.
The logic is anything but flawed since it was precisely the hooker that was the subject discussed; not the John. The discussion was not about taxing the illegal activities themselves. You are merely attempting to change the argument by changing the parameters now that you see you've lost it. The only guys who have ever claimed the FairTax would tax illegal activities has been the SQL crowd as another strawman argument.
In fact, it may be that BOTH the John and the hooker are breaking the law under the sales tax. Most likely both are by collusion but I'm not enough of a lawyer to tell from the language of the bill. But then, aren't they both breaking the IT law, too, similarly, or did the John furnish a 1099? And who knows if the John's income represented has been reported as income? Or if any funds changed hands at all - perhaps it's a barter situation, eh? We really don't know and to posit that we do is merely guessing. And keep in mind that at least one of the parties (if not both) would be outside the law in either case.
In any event the FairTax captures tax revenue from he underground economy even if it gets it only from the hooker and not the John. Half a loaf you know. That's better than nothing as at present. In addition the unreported income from illegal aliens (unless you'd like to make the strech again that all the money they take in had income tax paid on it and will not have a sales tax paid) will now be taxed as will money from foreign tourists.
Once again, these sources will be subject to some capture of tax revenue where they are not at present. The SQL crown should stop trying to put the words in the mouths of the FairTax supporters that were never there. These are not exaggerated advantages, they are real ones. And they are not matched by any similar advantages in other tax systems.