So you are taking the position that all business that currently charge a lower price are defrauding the States of their sales tax revenue?

Quote Originally Posted by SadisticNature View Post
Lets make the math less messy on the example.

Person A charges you:

$1000 + $300 in sales tax for $1300 total and reports the sale properly and sends the amount on to the government.

Person B charges you:

$770 + $230 in sales tax for $1000 total and doesn't report the sale properly, and doesn't send the amount on to the government. On your bill it appears as sales tax, but it doesn't get reported to the government that way, they just pocket it. It also appears to you as if the government got paid and you have no easy way of knowing they haven't.

So by going with person B for better price for the same quality customers are driving person A out of business. Why? Because he was being honest on his taxes.

As for poker tournaments, the typical entry for big live events is $10,000 + $100. The entry fee is 1% of the prizes + television and spectator revenues. If they were to take 50% of the entry as fees the industry would die, because no pros could make a profit on that. Paying 23% of an entry fee out of the 1% taken is a rather difficult thing to do! I also dispute that 23% is the actual correct number. It's far more likely to be 30%+, unless you want to increase the deficit dramatically.

For every economist claiming that this tax does better I can give you nine who disagree. The problem is the analysis assumes a fraud free model. If there is no fraud in either model then the UnfairTax drives the economy more aggressively, by forcing unprofitable and less profitable companies to pay a larger tax burden, which includes making marginally profitable companies unprofitable, and resulting in companies that are struggling slightly, going outright under. If you assume the government isn't going to bail out any of these companies (pretty big if given the track record), then the ones that succeed can drive the economy. However in any model where companies are allowed to defraud the taxation, the economy is driven almost entirely by fraudsters bankrupting honest taxpayers. This leads to needing to raise taxation as revenues decrease and further hurts the country.