I am not nieve. I hire contaract labor myself. There is a significant test to determine whether someone is a contract laborer or an employee, many contract laborers fail that test and subject the business to significant penalties.
http://www.payroll-connect.com/Articles/2002/July/ContractFLSA.cfm If they give a false SS number (TIN) they are subject to back up withholding at the rate of 30%. Yes it may take a while for the IRS to catch up with them but they do. A number of back up withholding requests from IRS may subject the business to a complete audit of their contract laborers. As I said before if they pay under the table they have to pay substantially less because of inability to write it off. There is substantial risk of not carrying workers comp insurance, of course some people swim with sharks....with that increased risk businesses that employee illegals and don't pay the correct taxes insurance etc take the profit in exchange for the risk. It is not free competition. It is illegal competition and they are in fact subject to unfair competition charges...and RICO statutes...
http://www.vdare.com/fulford/ricol.htm With the NRST illegals will be paying taxes when they consume. As for why some people hire them, some believe it is because they do jobs others will not, while I believe it is because they can pay them less and in return for their risk take more profit compared to legal employers...
This is a discussion about a national sales tax - good or bad. It is not a discussion about illegal aliens - I will debate that issue with you until the cows come home - but not on this thread.
Don't try to educate me on illegals and the hiring practices for them and don't try to educate me on contract labor.
Now I truly thought you were being naive and that is the only reason I answered you - I have no intention of getting into illegals on this thread. I will gladly ping you on the next illegal thread, if you like.
Bottom line, not collecting or paying taxes on your employees (fact) in the construction and agribusiness has not resulted in any savings to the public - therefore, I question that no income tax is going to be savings enough to make up for the 23 to 30% added sales tax.
As I said, if you would like to discuss illegals - I will ping you to the next discussion and we can go at it - right now I am talking sales tax and right now I must turn the 'puter over to daughter.