Of course "X" excludes food and energy price increases.
With embedded taxes removed from the price of what you buy, the price of the product goes down, so the only federal tax you pay is the FairTax when purchasing a new item or a service. You would pay FairTax on cheaper goods and services for your spending above the poverty level.
If embedded taxes are removed from prices, that means employees have received a cut in gross pay, but still have an unmet tax burden.
I was very careful to not claim all embedded taxes would be removed. Employees still get their gross checks which leaves some embedded tax. However, removing corporate income tax, employers share of SS and the associated compliance costs will result in major cost savings. I trust the free market to reduce prices in response to lower costs in a competitive market.
Of course "X" excludes food and energy price increases.
And, of course, X is adjusted periodically, as is any index related to the cost of living. And the adjustment lags behind any change in prices. So how does this make the FairTax refund adjustment inferior to any other cost of living adjustment?
You are expecting perfection in a replacement for the income tax, for crying out loud. Please tell us, with all its perceived imperfections, how the FairTax is inferior to the our present income tax.