They buyer pays his own tax from withholding and in April. In the case of an illegal income earner buying, he doesn't ever pay his own taxes.
Under the nrst, buyers will pay their own tax, not others' taxes, b/c others' taxes won't be in prices anymore.
The base is broadened by virtue of expanding the item which is taxed [consumption is broader than taxable income.]
While toddster would like to argue the amount of tax or tax costs paid by the illegal earner is relevant, it is not. What is relevant is the broadening of the base.
It's easy. Consider a universe of 20 people needing 90 cents to fund government. Take 18 cents from 5 people or take 5 cents from 18 people?
Our current income tax is the analog of 18 cents from 5 people [ i wish it was 18 cents!]. The illegal income earner is not one of the 5 payers. But the 5 payers up their prices to cover their tax costs. So no matter who buys, the seller's tax costs are covered. Of note here is the case of a legal income earner buying.... he's had to pay income tax AND will have to pay seller's taxes.
The nrst is the analog of the 5 cents from 18 people. The base is larger, the rate is lower, the same amount collected. In this case, the seller has no significant tax costs to recover and so has none in the price. 18 people pay a little. The illegal income earner pays too.
That is essentially what I have said! Perhaps less than effectively. Beyond that, you will not find an economist anywhere, even amongst those who argue against the FairTax, that doesn’t understand the sales tax base to be FAR broader then the current income tax base!
That's great! So what is the difference, to the drug dealer, between paying 29% of his purchase for others' taxes and paying 29% of his purchase for his own taxes?
The base is broadened by virtue of expanding the item which is taxed [consumption is broader than taxable income.]
The article claims prices remain unchanged.
While toddster would like to argue the amount of tax or tax costs paid by the illegal earner is relevant, it is not.
Bigun claimed receipts from the drug dealer will increase. Was he wrong?
The illegal income earner pays too.
The source Bigun posted showed the illegal earner already pays 29% of every purchase. Will he now pay more? How much?