An income tax diminishes income. There are many examples of this. This was one reason why Reagan became a Republican, because of high marginal income tax rates that were affecting him. Look at Europe's high rates, and how the US is (comparatively) better off.
A sales tax diminish sales. There are many examples of this too. Look when (New York state?) reduced the sales tax on clothing. Sales increased dramatically. Look at the difference between Oregon and Washington. One has an income tax, one has a sales tax.
A 23-30% sales tax will DEFINITELY hurt sales. To not understand that woefully underestimates incentives/costs and people's/consumers/taxpayers reactions.
I believe that you are not considering the entire tax dynamic when you say that the FairTax will hurt sales.
Keep in mind that prices will be reduced prior to the FairTax being applied and then be increased back to around what the were and you will have more money in hand to buy things with - no income tax, receipt of the prebate, a wider tax base with consumption rather than income, and a greatly expanding economy. Since the FairTax is revenue neutral there will certainly be little or no overall damage to consumption. The basic revenue amount is the same, it is being obtained differently ... BUT the tax will now apply to a part of the tax base that had not been taxed before to any great degree - the illegal economy.
Rather that hurting sales these things should, along with an expanding economy, greatly help sales.
"A 23-30% sales tax will DEFINITELY hurt sales. To not understand that woefully underestimates incentives/costs and people's/consumers/taxpayers reactions."
“In both Europe and Japan, incentives to generate the personal savings necessary for funding investment in new factories were emphasized. Consumer credit was limited, and in Europe retail stores operated on restricted hours and not on weekends. Sales and value-added taxes were levied on consumption, while interest income on savings accounts and stock dividend payments were exempted from taxation. In tandem with this effort to stimulate savings and investment went the provision of various incentives to spur exports……...
In contrast to Europe and Japan, the United States came out of the war as a major producer in almost every industry. It had no concerns about production. But its leaders were haunted by the fear that, absent wartime demand, the economy would lapse back into the depression from which the war had jolted it. America thus adopted a strategy of spurring consumption. Home mortgages were made easier to obtain, with interest being tax deductible. Credit cards were made easily available, and interest on consumer credit purchases was also made tax deductible, while interest and dividends earned on savings accounts and investments were fully taxed. So while Europe and especially Japan focused on saving, investing, producing, and exporting, America’s growth policy was one of borrow, spend, and consume.”
Pps 11, 12. Three Billion New Capitalists – the great shift of wealth and power to the east, by Clyde Prestowitz
As Prestowitz points out, our current tax system (well, actually our entire economic system) encourages borrowing, spending and consuming .... and it works VERY well, perhaps too well. Our massive and growing trade deficit and our virtually zero national savings rate are testament to that. The economic trends that we witness are simply not sustainable. We have two choices.
1. Ignore the warning signals and wait until the trends produce massive economic damage and pain, or
2. adjust all our economic systems (including our tax system) to align better with the environment of the 21st century.
Prestowitz does a good job IMHO of explaining how we got into this mindset of encouraging consumption as the major foundation of our economic philosophy. It may have been appropriate for the post WWII timeframe, but it is going to cause massive economic pain if we don't adjust soon.