"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.
phil_will1 wrote:Are you talking about illegal aliens who operate as independent contractors and don't pay income taxes or self employment taxes?
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.
I'm sure when the alleged "fair tax" becomes law, these illegals will go right out and apply for a taxpayer ID so they can collect sales tax on the taxable services they sell and remit the sales tax on those sales to the state. Or they could just continue to operate illegally and not report their sales of taxable services and evade the alleged "fair tax" just like they evade the income tax today.
Isn't it far more likely that the same income that evades taxation now will be for taxable services that won't be reported or taxed under the fair tax?
I'm also highly skeptical of your claim that they won't get rebate checks.
pigdog wrote:Isn't that the same half loaf that gets collected now through hidden taxes embedded in the price of everything the hooker buys?
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.
By definition, the "underground economy" doesn't pay taxes. It doesn't pay income taxes, and it won't pay any "fair tax" under your proposed system. The alleged "fair tax" changes who is breaking the tax law and who the evader(s) are. It also changes who is paying actual taxes on each side of the illegal transaction. But, it doesn't eliminate the tax evasion. And it won't collect significantly more revenue from the "underground economy" than the current system.
Your arguments are just exaggerations and made to play to people's jealosy and/or disdain for current tax evaders. You conveniently leave out the new tax evaders in the "fair tax" environment. That's hurts your credibity. It's either ignorance or a deliberate attempt to mislead (and it's been pointed out enough times over the years that I doubt it's ignorance).