The example given by s-test which has illegal aliens paid by someone with after tax income is well off-point since that money has been taxed by an income tax from the legal economy regardless of whether the after tax money is spent for day labororers, jellybeans, or stuffed in a mattress. It does not derive a cent of tax contribution directly from the illegal economy.
Such an example also pre-supposes that the person with the legal income actually PAYS income tax (not everyone does) so it would be necessary to offer some convincing data about the taxes paid (by those hiring day laborers) since many pay at a rate of, say 15%, which is still less that the tax contribution derived by the FairTax,
The FairTax in a similar situation is quite different (assuming in both examples the illegal income is not taxed) in that the illegal income will be taxed and at a rate of 23% when spent for taxable items.
I also find no justification for your uncorroborated assumption that "... the magnitude of lost tax potential in each scheme is about the same ..." since it clearly is not as the legal income is taxed regardless of what it is spent for (or even if it is spent) while converting it to illegal income by hiring illegals yields no further tax revenues at all at present but clearly does with the FairTax - at a 23% rate. The illegal economy will clearly yield greatly more tax revenue under the FairTax for that reason.
With the case of drug dealings this is even more clear since a great amount of the money spent for drugs presently is stolen money - completely untaxed with no income tax paid at all (and the same comments as with the above example apply to any legal income involved). The FairTax will also yield considerable larger tax contributions fom this part of the illegal economy when spent for consumption.
No "experiment" is necessary to divine the benefit of the FairTax on this matter - it is quite obviously highly favorable to the FairTax.
Wow.
You clearly have no grasp of what you are talking about.
I don't intend to be nasty, but after reading that post, you either just don't get it or you're just being argumentative hoping no one will actually read what you write. Whether you realize it or not, (I suspect not) most of what you wrote in post 459 validates our point:
the money flowing into or out of the illegal economy gets taxed exactly once in either the current scheme or the FairTax scheme. No illegal transaction get taxed, therefore, given a revenue neutral system, the same dollar flow yields the same tax (just at different points in the flow.)