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

Before I begin refuting your arguments, I would just like to point out a very blatant misunderstanding you have about the prebate. The prebate is NOT based on income in any way. A check is sent to every American household for an amount depending solely on the size of the family. A rich married couple would receive the same check as a poor married couple, the difference is that it will be insignificant for the rich and a blessing for the poor. 1) The 23 Percent Math Well, according to a study by Laurence Kotlikoff, economics professor at Boston University, "Ensuring real revenue neutrality at the federal level, given the net base of $9,355 billion(which is adjusted for the prebate and collection fees), implies a rate of 23.82% on a tax-inclusive basis and 31.27% on a tax-exclusive basis. " While this is slightly higher than the 23% originally quoted, this is the rate that would produce enough revenue to match spending projections for 2007. Note that we currently have a deficit of several hundred billion dollars. With the 23% rate, we would have a deficit of $76 billion. 2) Regressive Tax It seems as though your entire argument here is based on your misconception of the prebate, for the fairtax is absolutely a progressive tax. I already showed you how a couple making $50/year would benefit under the fairtax, so to make the claim that, "those making between $25k-$200k/year, who wouldn't receive the "prebate," actually would have their tax burden increased," without addressing my point implies to me that you didn't read it, so I will suggest that you go back and read my first argument. As for the wealthy having their tax burden lowered, that will depend on their source of income as well as their spending habits. Wall Street executives getting paid million dollar salaries will most definitely see a decrease in their tax burden as they are currently taxed more than any other American. However, little girls relying on their fathers wealth will be paying much more in taxes, because wealth is not currently taxed. 3) Enforcement/Collection Problem Under the fairtax, the only way that you can purchase new goods tax free is if you are a licensed retailer. Now you make the point of the online market for "secondhand" goods. If by secondhand, you mean used, than it's not a problem because used goods are not subject to the fairtax. However, I am also aware that many people on ebay sell new goods as well. But where do they get them? For the most part, they purchase goods wholesale and keep them in their basement. In order for an ebay business to continue under the fairtax, they would have to become licensed retailers in order to purchase their product tax-free and charge the tax to their online purchases. It's not unfathomable for the government the monitor internet transactions to ensure compliance. Collecting taxes under the fairtax is much easier than the current system, not only because the forms are simpler, but because the number of taxable entities is reduced nearly 80%. Regardless of the fact that there will be new businesses taxed that were not taxed before, there are over 100 millions households that are no longer taxed that the IRS, or its equivelent, will no longer have to worry about. This means that they can focus their efforts on a much smaller pool of tax-payers. Border crossing is only a potential problem for people that live right on the border. It would be far too inconvenient for a significant portion of the population to cross the border to go shopping. "The claim that "the relative cost of retail goods and services after the FairTax remains very close to the same levels found in the marketplace today" by the AFFT makes no sense when you couple it with this claim 'American companies doing business internationally are able to sell their goods at lower prices but at similar margins. '" First of all, I believe that first claim was made with the assumption that companies would lower the gross pay of their employees to their current net, and pass all of their savings from removed income taxes onto consumers. It is most likely that gross pay would be reduced as well as retail prices, by an amount determined by market pressures. Going back to your point, there's no reason why their is a contradiction between those two statements. If the price of goods after the fairtax remains the same as they are today, than if they are being sold internationally without the fairtax than they will undoubtedly be able to be sold at lower prices. "Americans will have a considerable incentive to skip paying the Fair Tax by buying more goods from outside the US. " Again, it's simply a matter of convenience. Imported goods would be subject to the fairtax, so a person would have to physically leave the country in order to evade the tax in this way. It's simply not practical to think that a significant portion of the country would do that. On this subject, I would like to point out that there is currently a black market with total expenditures estimated around $1 trillion. Currently, this money is not taxed at all because this income goes unreported. However, drug dealers and organized crime syndicates do purchase legitimate products as well. They all need to buy food and clothing and the like, and some may even buy cars or houses, all of which would be subject to the fairtax. In this way, the taxable base expands under the fairtax and current levels of tax evasion may be reduced. 4) Massive New Bureaucracies Because the prebate is based solely on family size, disbursing it to every American household should not be that expensive. Relative to what is currently spent on the IRS, we're talking pennies on the dollar. Also, since most(45) states already have a sales tax, the federal government will simply pay the states one quarter of one percent of the fairtax that they collect. Of the roughly $2.4 trillion collected, that works out to be 6 billion dollars. Again, pennies on the dollar compared to the IRS. Domestic Goods vs. Imports I can't really argue with the fact that other countries might place tariffs on American goods if they are too competitive, but perhaps they will decide to adopt their own fairtax-like system instead. As for giving foreign products a leg up, I do not understand your thinking at all, forgive me. Both American and foreign goods would be subject to the fairtax, but while American products would only be subject to the fairtax, foreign goods may be subject to their own national taxes, so they will certainly have no advantage, at best they would be on the same level if their government had a system of not taxing their exports as well. "Taxing Undocumented ("Illegal") Immigrants Myth" There are currently no federal sales tax, so they only pay taxes to the state in that regard. As for income taxes, I believe most of them are paid in cash "under the table," and do not pay any income taxes. You seem to contradict yourself here when you say that the fairtax would further impoverish undocumented immigrants, while making it easier for them to operate here. Can it really go both ways? Capital Gains Tax Rate The thing is, capital gains taxes are so easy to evade, even legally. As long as you reinvest your capital gains, you don't get taxed on it at all. So the common practice is to buy real estate with it and than take out a line of credit against the real estate if you need money. Paycheck-to-Paycheck Rate Well, when we examine a person's tax rate under the fairtax, we assume that they're spending 100% of their income for that is the absolute most they could pay in taxes. If they aren't living paycheck to paycheck, their effective income tax rate will only improve.