Let's get this straight:
1. Prices from the elimination of so-called embedded taxes would fall by 23%. (let's skip the tax-inclusive vs. tax-exclusive problem) The fairtax would then raise that price back to where it was. (Fairtaxers claim that prices would stay the same.)
2. Meanwhile, my income tax goes to zero.
3. If prices stay the same, and I pay no income tax, how does the government get revenue?
Sounds like a lot of SOMETHING FOR NOTHING to me!
It certainly isn't "something for nothing" as we'll see ...
First of all - the embedded tax costs are not "so-called", but real and yes, they will fall when income tax is eliminated. I have never said this would be 23%, but IMO it would be somewhere in the range of 15-25% or possibly more depending on how the economy bumps upward. The decrease will be substantial, though, and it will help reduce prices.
The offset, of course is that things sold at retail will carry a 23% tax inclusive tax which raises the prices back up to about where they are presently; perhaps a little less, perhaps a little more(remember the FairTax is revenue neutral).
And, yes, your income tax has gone the way of all good things while your income is increased by not having to have income tax withheld on wages and by investment income not being taxed.
The government tax revenue comes from the tax on retail consumption sales and it is actually boosted even more by being able to obtain tax revenues from the "illegal economy" (drug dealers, illegal aliens, unreported cash betting, unreported tips, and even from visitors from other countries) all of whom will buy things at retail.
In addition to the above, foreign capital will be attracted into the country as a serious tax haven and this will help "boom" the economy even more creating even more tax revenue. The problem is likely to be one of us as taxpayers and voters insisting that spending be cut. Being in a position to do that with a tax like the FairTax is a good problem to have since the tax money is no longer taken by coercion up front.
But "something for nothing"??? Not on your life - just the working of a robust economy for a change, unhindered by tax policies.