Income Taxation

[SEC=UGA]

Black market good

 

Goods sold off the register tape

 

Second hand goods.

 

Unreported services performed but paid

 

just to name a few.

 

EDIT TO ADD: Sales tax is also (theoretically) a much less reliable way of collecting taxes. Real estate tax is probably the most reliable, as property ownership is stable/increasing. Income tax would follow, being dependent on employment levels. Sales tax is dependent on spending behavior, which fluctuates dramatically with economic trends.

 

Black Market Goods - Taxes are paid the entire way through the production of the goods. Are you implying that the only one that will dodge these is the end user? You would have to have one HUGE black market which would not go undetected. That and most of these goods would have to be stolen, something that would not happen on as massive a scale as you believe.

 

Goods Sold off register tape - Again, you would only have the end user benefitting from this as the tax is applied through the entire production process. Again, the market for this would have to be massive and would not go through unnoticed.

 

Second hand goods - most of these are not taxed already if sold by the initial owner. Further, the fairtax does not tax used items and does not count these transactions into its estimates for tax collection.

 

Unreported Services - Already goes on. I don't think that these services are taxed already, except at the income level of the individual. Since this does away with the income tax and is a sales tax, it wouldn't matter any way.

 

Here is an article on compliance under the Fairtax.

http://www.fairtax.org/site/DocServer/TheF...n.pdf?docID=601

[CowboyGal2011]

t I also recommend removing any incentive for companies to pay employees under the table. That would create the same effect.

 

No, it's much larger than that. Illegals, drug trade, vacations or students with Visa's, the underground economy is huge and untapped as far as a source of revenue to power the basic duties this country has via the constitution.

 

How big is the underground economy? The General Accounting Office and the Internal Revenue Service produce estimates every few years that differ widely, but one government study calculated that $500 billion in income fails to be reported each year. Another estimate, based on consumer behavior, suggests that 4 out of 5 Americans turn to the unregulated world for goods and serviceswhich would raise the $500 billion figure appreciably.

 

http://www.boston.com/news/globe/ideas/art...he_underground/

 

$500 Billion easy, or much, much more.

 

The Fairtax for example, is a perfect way to tap this and make the tax code fair for everyone. Not just those with the best lawyers or lack of morality, ie Tim Geinter types.