1) The people who buy knock-offs wouldnt actually have purchased the authentic ones anyway (although they might purchase some). The reason the secondary market exists is because some people don't value the goods for the price that is charged. If there were no such thing as knockoffs, yes then some people might buy the authentics but most wouldn't.
If the money isn't there for the people making the handbags, it isn't because there isn't enough money to go around. It is because management wants to get the job done for the least amount of money possible. Take outsourcing to be a major example of this. Levi's closed a factory in SF some years ago that was still profitable (at least thats what I recall) because if they exported the labor to Mexico, they could deliver the same product for even less.
I'm not saying that because they have less than the big companies, it is okay, but if the economy is so important, then this gap between rich and poor is definitely not a good thing. And to me, it is more important to help those who need the help, not those who are already living comfortably.
2) The state of economy is not solely determined by taxes. And even if they were, I'm sure many people who do sell handbags have to pay taxes (whether or not they alter their numbers is a different story). Also, it isn't as if large corporations don't avoid paying taxes as well. They are always finding ways of reducing their taxable income, using accounting to change their figures as well, so aren't they hurting the economy far more than the small individual knockoff dealers? If taxes are what the economy is based on, then large companies who have the resources to find analysts and accounts to alter their numbers hurt the economy the most.
3) Yes, that is indeed true but you cannot associate all people who sell knock-offs with this stereotype. My point is not that all things associated with knock-offs are good, simply that there are two sides to every story. And working isn't only defined to be work at what you consider "real" jobs. Work is work, a way to help provide for your families. Some people are lucky to be able to do what they enjoy for a decent income, others aren't.