Even if we grant that there will be a sizable underground economy (a “black market”) under the FairTax (which I don’t), the profits FRom the black market will, at some point in time, be taxed.
The existing “black market” is sizable — I have seen estimates ranging up to one trillion dollars, and ALL of that money is not taxed.
Do some research on the subject “FairTax and the underground economy” and you will come to understand that the underground economy siphons a great deal of money out of the economy under the current system.
Due to the fact that under the FairTax, all consumers are treated equally (same tax rate on purchases) one can make a credible argument that the underground economy will shrink under the FairTax.
The “underground economy” arguments don’t move me an inch ... We abolish the IRS and put each states INDIVIDUAL revenue departments in charge of collecting the “FairTax” just as they NOW ARE with state sales taxes.. it’ll just be a larger cut... no change in needed manpower or expense to businesses, just a simple one time reprogram of their cash registers... Let the states retain a large percentage ,, say 75% in-state and only forward 25% to D.C. as an incentive to correctly collect the taxes...
At a far lower rate.
The existing “black market” is sizable — I have seen estimates ranging up to one trillion dollars, and ALL of that money is not taxed.
True. Sounds like we need a simpler tax code so that the IRS can focus upon enforcement.
Do some research on the subject “FairTax and the underground economy”...
I've been reading about it for twenty years. It is theoretically appealing (I once advocated it), but once I understood the nature of the collection system, no. I don't want the government tracking my ammo purchases. You can pretend they won't, but they will. I don't want the government forbidding me from buying ammo if they believe or rule that I somehow cheated on the tax by some barter transaction. What I buy or sell is none of their business.
You have no idea where the enforcement of an NRST will go.
Due to the fact that under the FairTax, all consumers are treated equally (same tax rate on purchases) one can make a credible argument that the underground economy will shrink under the FairTax.
Your first argument above refutes the last. Try at least to be consistent.