the price of the used item will be bid up by other market participants, until it is, utility wise, priced the same as if it had been taxed at the "FairTax" rate? To not understand that basic economic fact is to suffer from a delusion.
IN your dreams. Only shortages get "bid up". IOW, the efficient market will take over, as has been argued all along.
And you can escape taxation on savings now! Just buy tax efficient mutual or index funds. Or a diverse group of Blue Chips - and hold. Look ma, no tax! And you do not have to be a moneyed interest to do this, for the investment of a few cartons of cigarettes you can get started!
And who is going to pay the taxes on your capital gains distributions, your dividends, the tooth fairy? You should read a book about mutual fund investing before giving out bad tax advice on a public forum.
How will the market create a supply of used products to meet demand?
I bought a new car that was so bad, my daughter bonded with owner of the garage where I took it for repairs. Before buying my next car, I did a lot of research, identified a car I wanted to buy used and began searching. Unable to find one with less than 100,000 miles in reasonably good shape, at a reasonable price, after months of looking, I decided it was more cost effective to buy new. Demand created a scarce market and high resale value.
Even today, it is difficult to find That particular car (later model, of course) for sale, used at any price. What happened to market efficiency?