While no one is claiming that tax evasion will disappear under the Fair Tax, Worstall overlooks two prime characteristics of the proposal that will make evasion decline. First, the number of collection points under the Fair Tax drops from 155 million to 20 million, making the Fair Tax far easier to supervise and administer. The VAT that both Worstall and discredited economist Bruce Bartlett champion is in fact a step backwards towards more collection points.
Second, evasion under the Fair Tax drops exponentially because it takes only one to cheat on an income tax. It takes two to cheat on the Fair Tax – a seller and a buyer. Sellers who cheat under the Fair Tax will be gambling with their registration certificates, which will represent their economic livelihoods.
The evasion argument against the Fair Tax is a non-starter.
~Jim Bennett
Summit, NJ
