I guess you are saying that companies would sell product under the table and not charge the sales tax. I'm certain that would happen, today we have people selling bootleg cd/dvd etc. What does happen now and would be more likely are dishonest retailers who collect the sales tax but under report it keeping the excess as profit. Several truck stops got caught doing this very thing and the money was big.
So like any law it needs to be enforced. Remember the IRS would be disbanded so there would be some employees who would transition to sale tax enforcement.
For me the positives outweigh any negitives. The government controls all of us via the tax code and I don't believe politians are smarter on how to spend my money them me.
Much of the money that is now "under ground" will be taxed for the first time. Think of crimals and others who hid their income now would be taxed when they spend it.
All the rich individuals and corperations who keep their money overseas to avoid income taxes will bring it back here. Why, no income tax and still the safest place to live and work. This will cause increase in investments here and increase in jobs here.
Another interesting aspect of the Fair Tax is in the future all Social Security reciepients would get the same amount. This would be because all the income taxes would be replaced by the Fair Tax including Social Security and Medicare. The way the system works now the more you pay into Social Security the more you are paid. So those who have the least continue to do so. I personally believe a means test should be applied to Social Security.
Please take to time to read from the web site it dose a far better job explaining than I can do. Mike.
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