The Fairtax plan will benefit the economy and the majority of Americans

Prebate Unfortunately you're assuming that the public will is all that is required for political action to be taken on behalf of the best interest of the public. Regrettably that is not so (which is why our tax system is currently in the state that it's in; absurdly confusing and full of Mac Truck-sized loopholes through which the wealthy drive their wealth). I in theory as stated by its proponents, the Fair Tax plan does seem to eliminate the exemptions that the wealthy currently use to tilt the tax system in their favor and avoid paying the full price they owe the state. But unfortunately that's only in theory, and there isn't enough concrete explanation in place to explain all of the logistical problems and complications. Further, letting citizens decide for themselves what is best isn't always a great idea on everything. That's why we created Social Security; to provide insurance for the disabled and the elderly because invariably a large proportion of the population does not adequately plan for its future (or cannot, regardless of whatever good decisions it makes). Exemptions are one way that special interests get favors – subsidies are another (and there are many beyond that). 1) 23 Percent Math Our differing opinions of disingenuousness aside, taxes on consumption would invariably tend to decrease consumption – but the problem is that it's hard to tell how much it will decrease. Savings and investment aren't synonymous. For starters, something like Federal Reserve estimates that around 9 percent of US households don't even have bank accounts so they're not even earning interest on savings accounts. For many more that do, they may have savings accounts but they don't invest in the stock market. Only about half of all households in the US are invested in the stock market (one guess as to which half of the socioeconomic classes it is). Pot dealers spend money, but we don't know what their spending habits would be under the new system. 2) Regressive The middle class is declining for a variety of reasons, only one of which is outsourcing (many people argue that the effects of outsourcing are overstated). Jobs aren't only outsourced for tax reasons (as I've mentioned). They're also outsourced because the standard of living is lower in other countries, and because the labor laws are weaker, and in the case of manufacturing – because the environmental regulations are looser (or nonexistent). Here in Michigan there have been many examples where companies are offered virtually zero taxes and they still pick up and leave because those other countries offer savings in those other areas. The possibility of loopholes still exists even with the Fair Tax unless other measures are taken. There are quasi-foreign nations like the Marianas Islands that afford corporations the benefits of both worlds (they've long been used for skirting labor laws here in the US). 3) Enforcement Collection Problem The simplicity of the current system is dependant on the participants willingly following the laws and not skirting them. I pointed to examples like eBay to show how many potential casual lawbreakers there could be who might skirt paying the sales tax. For the more concerted, these types of e-business platforms make breaking the law pretty easy – especially if they set up operations overseas where they're beyond the reach of US law enforcement (which happens frequently right now with online casinos). A similar problem would exist for sales of foreign goods. All it takes is for the intermediary bank to be one located in a country unfriendly to the US for the sales tax to be skirted. Taxing Undocumented ("Illegal") Immigrants Myth Again, wages aren't the only cost associated with employees. So there's still wiggle room for expenses to go up and wages to stay the same (or for employers to absorb some costs themselves). I don't have any statistics on it, but a lot of the undocumented workers are in the agricultural sector and it's possible that they could be given produce as part of their wages (as is likely done now) which would help skirt paying the consumption tax. The same goes for lodging – which is the case right now; they frequently set up trailers or communal housing on their property for their employees. A lot of the other goods they may need could be purchased secondhand (as they likely are now). Credit Card Debt There's a difference between per US household and low- and middle- income households – but it's irrelevant given what we're talking about, which is primarily those lower-income households that have the majority of the debt. All of the positive postulations the Fair Tax makes about raising people's standard of living relies on leveraging the power of the Fair Tax against those households in particular because they're the ones that are hurting. Nobody is really concerned about making the upper income, non-indebted households better. It's not just credit card debt either. It's the fees and penalties associated with that kind of predatory lending. In some cases, lenders make more off of the fees and penalties than they do off of the interest from their loans. It may not be that these people are routinely spending $8000 more than they make in a given year – what's probably more likely is that they have one bad year where they lose a job, get divorced, or have a serious medical issue come up and they go way into the hole and spend the rest of their lives trying to dig out from it. Unfortunately the Fair Tax isn't going to help those people (and they represent 90 percent of those who declare bankruptcy). I thank you for the excellent debate as well – it has been enlightening.