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.
The discussion was about taxing the underground economy, so yes it is exactly what we are talking about. You are merely attempting to change the argument by changing the parameters now that you see you've lost it.
The arguement has not been lost, you just fail to understand the facts.
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
Again, this is no different then the current system. When the money is spent on a legal transaction today, it creates income for the retailer which flows down the entire supply chain and even back to the producer. You claim there is 20-30% embedded taxes in consumer goods today. If that is the case, then what's the difference? Legal transactions taxed, illegal transaction illegally avoid taxes. If there is a $1 Trillion underground economy, both systems are missing out of collecting a lot of owed taxes. Certainly that most of that money flows into legal transactions, but no system captures the taxes that are legally due from underground transactions. Taxes are avoided.