Thread: FairTax and Trade

Originally Posted by johnwk

You just can't admit something when your wrong or know nothing about.


See: How Big Is the Underground Economy in America?

2016



Despite the inherent difficulties involved in such measurement, economists have attempted to calculate the size of shadow economies. One such economist, Friedrich Schneider, estimated that the size of the U.S. underground economy (not including criminal activity such as drug dealing etc.) relative to GDP was 7.2% in 2007, which was below the OECD average of 13.9%.



A 23 percent tax would encourage the underground economy to expand dramatically.


JWK

I don't care. That's up to the authorities to enforce the law. Under the FairTax, it's easy to catch them, easier to shut them down, you're using something that arose 40 years ago which isn't even an "underground economy", it's just income tax evasion as some reason to oppose the FairTax which isn't an income tax, it's a national retail sales tax. It's just tax cheaters. The fewer tax collections you have the easier it is to manage it and enforce the law. There's only 6 million entities that will collect FairTax versus over 200 million who are subject to the income tax. And states will be involved, they get a fee, they'll be very diligent in collecting all the tax and going after violators, because it's money out of their coffers, too.

That said, the FairTax assumes 15% evasion, the same as the income tax. The beautiful thing about the FairTax unlike the income tax is that when the crooks spend their money they stole from consumers, they will pay FairTaxes when they do. So, the tax evasion thing is not an issue for me. We have lots of crooks in the United States, but I'm not one to allow them the power to prevent a fix to our country.

I've never heard real people call income tax evasion an "underground economy".