This is a strawman argument that completely ignores that even prostitutes and drug dealers DO NOT pay income taxes but they still have to buy groceries and appliances and furniture and automobiles. No matter how you spin it, this is a net GAIN for the government.But under the current system, the John and the drug buyer paid income tax on the money they are giving to the prositute and drug dealer. They wouldn't under a NRST.
Looks like a private transaction to me. Do you currently remit taxes to the state and county whenever you buy an item at a yard sale? You won't do it under the NSRT, either.
That's because the nrst doesn't tax any income.
One's entire tax burden is paid thru purchases at retail.
It's not a wash at all. Many drug purchases are made with stolen money, not earned income and so your argument fails.
In fact, you have no basis for the statement at all since it is just as likely as not that the John & drug buyer paid little or no in the way of income taxes. That asumption is equally as valid as to the flight of fancy you came up with.
Under that assumption none of the 4 paid much or any income taxes so the government got nothing whereas with the FairTax they will derive much more tax revenue. There is no "wash".