Really? You actually believe that?
Marie wrote:
With the fair tax, you snag people like drug dealers, prostitutes, and people who otherwise wouldn’t pay taxes.
Riddle me this:
A drug dealer and a prostitute, right? That's who you're going to collect taxes on. They avoid the income tax because they don't report their illicit income (from illicit sales of goods and services).
Do you honestly believe that the drug dealer and the prostitute will report their sales of taxable goods and services, and will collect and remit the fair tax on their sales? Do you think the drug dealer is saying, "The reason I don't report my illegal income on my yearly tax return is because I disagree with the income tax. I'll be happy to collect sales tax on my sales and send in a monthly report of my taxable sales, along with the sales tax that I collect." Do you expect me to believe that.
Black market transactions are untaxed. That's part of the definition of "black market." Drug dealers don't pay income taxes, and they don't collect and remit sales taxes. Prostitutes don't pay income taxes, and they won't collect and remit sales taxes for their services. The same transactions where taxes are evaded under the income tax will have taxes evaded under the so called "Fair Tax."
As for when they spend their money, right now, Drug dealers and prostitutes pay "embedded taxes" in the price of everything they buy. The price of everything includes the income taxes of everyone who is in the chain that brings that prodcut to market. The store pays income taxes on its profits, the wholesaler pays taxes on its profits. The manufacturer pays taxes on its profits, the raw materials suppliers pay taxes on their profits.
When you misrepresent your plan with ficticious advantages, one looks closer at the rest of the plan. The FairTax has some very nice points. I like some of the ideas. But the actual bill that implements it is scary when you read it. There's some really bad stuff in their plan as well.
If they buy anything new, they’ll be taxed, just like the rest of us.
If they don’t, they won’t be taxed, just like the rest of us.
The Fair Tax is a consumption tax. There is no reporting. The tax is paid at the cash register. The pimp, prostitute, drug dealer ultimately pay when they buy goods and services from a legitimate firm... dentist, corner market, Sears...