Therein lies the reason the Fair Tax isn't fair, even with the "prebate," which is too complicated to explain in a sound bite.
I am in favor of a flat tax where everyone pays the same rate and deductions are limited to only charitable contributions and municipal bonds with a cap on both.
There is often confusion between the fair tax and the flat tax with neither proposal lending itself to a sound bite discussion. While the flat tax is better than the one now in place, under any income tax, all money received is not considered income for tax purposes. For the person receiving all his money from salary or wages there is no question about what is taxable income but there is multi generational distribution of wealth that has excluded many from the joy of paying for government operations.
The fair tax is often critized as leaning too heavily on the low income person who is more likely to spend a higher percentage of his disposable income for the necessities of life, but the prebate is a relatively simple method to deal with that problem. As you stated, the prebate does not lend itself to a sound bite explanation but should not be dismissed out of hand. Another provision that gets little attention is that while taxes are levied on new items, it is not applied to used or resale items. An example would be a new automobile being taxed fully but a used one not taxed at all. With the prebate and used items not being taxed, a person, especially at the low end of the income scale, could actually supplement their buying power.
I favor the fair tax for a reason not ordinarilly discussed but one I consider very important for our society. Since illegals do not have valid social security numbers, they would not qualify for the prebate which all legal residents would receive and would thus no longer have the monetary advantage over legal workers that they and their employers now enjoy. Also, those who receive their income from illegal activities such as drug dealing and other crime would not be able to avoid the tax system.
At best, I consider taxes of any kind a necessary evil but one that everyone, whether ultra rich, dirt poor or anywhere between should be exposed to. Basing a tax on income, however collected, excludes far too many from the hard reality of the cost of government.