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

Prebate I think we're we're mixing the implications between the theoretical world and the practical world. The prebate is necessary to keep the Fair Tax from being a completely unfair and regressive tax on the poor, however, that doesn't mean that essentials can't be excluded. In fact, one could make the argument (theoretically) that the exemptions could be used to guide people into healthier food choices to ease the burden of our massive health care costs given how important preventative measures like a healthy lifestyle are. The practical implications of exemptions are that our political process would probably kill the tax as every special interest lobbied to have its products/services considered to be ‘essential'. 1) 23 Percent Math I'm going to remain firm on the conclusion that the 23% rate is disingenuous. The vast majority of people don't think in those sorts of terms – so they're going to think that they'll pay a 23 percent tax on everything that they buy when they go to buy it and they'll be upset when that's not actually what it is. Explaining them what it ends up being on the back end after a bunch of calculations isn't going to help. The masses are not great fans of nuance. The connection between the Fair Tax and increasing federal revenue is tenuous at best, and it's based on a lot of moving parts. Assuming the money from the Fair Tax savings went from consumption to savings (tenuous), it would have to go to pay down the debt that the average person has before it would go into savings and thusly investment. That's definitely counting one's chickens before they've hatched. I've heard estimates of the black market being between $1-3 trillion, and the Fair Tax stands to recoup some of that through the taxes on goods/services – but it won't capture taxes from the sales of illegal goods and services so the amount of money it will collect will be minimal. You'll be taxing the pot dealer on the bag of Doritos he buys, and not the ounce of weed he just sold. Again, it could even decline depending on how many people who make the lion's share of that $1-3 trillion operate – if a lot of them launder their money and pay taxes on it, it could even be a loss. 2) Regressive In many cases, what's left of the the middle class is spending more than it's making. That shows up in our rates of consumer debt. I do like the idea of taxing the people who are dodging their fair share of taxes through loopholes like using private equity firms to hide their earnings by classifying them as capital gains. That's a good thing, but in practicality these things are going to have real and unintended consequences that we can't necessarily forecast. Many corporations go untaxed not just because they dodge taxes by loopholes in the way they classify their income, but because we've effectively bought into this idea that we need to lower taxes for corporations to improve the overall economy. I don't know if corporate exemptions are included in the numbers you're referring to – I would assume so. The statistics you cited from the Center for American Progress underscore the argument against lowering taxes on corporations and the wealthy as a way of bringing in additional revenue (which has been argued for years by libertarians and conservative republicans, which manifested itself in the Bush Administration's tax cuts). That said – I'm behind any part of any tax proposal that increases taxes for corporations. It would be interesting to see how that would manifest itself in practice though. Would corporations move offshore to dodge the tax burden? You're exactly right that the feasibility of the Fair Tax is challenged the most by its increasing the taxes of the wealthy corporations that have so much undue influence in our political systems. 3) Enforcement Collection Problem In eBay, each user is also a seller (or at the very least has the potential to be a seller). The numbers are significant because eBay is merely one platform, and there are hundreds of others (Craigslist, half.com, etc.) The infrastructure is in place already to dodge paying a sales tax, all that's lacking right now is the incentive to dodge it which a consumption-based tax will provide. What's the rest of the world going to do? Many, many things. Given how much money we owe around the world given our level of debt, they could start using that to squeeze us. They could also start flooding the market with their own cheap, government-subsidized goods and services. The idea that the US adopting the Fair Tax would cause other nations to do the same is a bit much. As far as online sales from foreign countries, I'm talking about products purchased from a foreign country. I can purchase a book, for example, from a bookseller in the UK – they ship it to me, and no one is the wiser. If they attempted to tax all foreign purchases, I could just claim that the money transferred was a donation to a cause I support. Taxing Undocumented ("Illegal") Immigrants Myth I don't have the strongest grasp of economics, but I understand some things. Wages aren't the only factor that businesses consider when they look at labor costs. They're an important one, but other things like worker's compensation, health care, retirement, fair labor compliance, etc. factor in as well. Even with the Fair Tax in place, it may still be cheaper for many businesses to hire undocumented laborers even if they have to pay them higher wages than regular employees because they save so much on all of the other costs associated with labor. Also – it may be that the business owner would provide (as many of them do now) many of the essentials (food/lodging) to the employees so that they don't have to address the consumption tax at all. Credit Card Debt I read my own links and I think the underreporting hypothesis is exactly right. I did wrongly say median when that number is an average, so I concede there. But there's no way the median credit card debt per US household is 2,200 (especially given that number comes from 2004). To wit: "According to our survey, the average credit card debt of a low- and middle-income indebted household in America was $8,650; the median was $5,000. One-third of households had credit card debt over $10,000, while another third reported credit card debt lower than $2,500." http://www.demos.org...