Your description of the thinking behind the FairTax “prebate” is.. colorful... but inaccurate.
The concept is that the necessities should not be subject to tax. But rather than define specific items that are tax-exempt, which is a minefiled for multiple reasons (two most dominant: 1) say we exempt food... which foods and what quantities? Hamburger but not steak? Crab but not lobster?; 2) who are we to decide what is “necessary” in a one-size-fits-all model?), the decision is to use the poverty line as the amount for “necessities” and to provide a tax credit for the amount of sales tax on that amount.
Note that calling this a “basic income guarantee” would be like calling the personal exemption and standard deduction of your income tax a “basic income guarantee”, because that’s exactly what this would parallel and what it replaces.
Just because two things have superficially similar outcomes does not mean that the two things are in any way similar.
We have had this discussion before. I assure you. Please Google the Brookings institution papers of the Fair Tax. It might be informative.
Only food grown for use on the farm shall not be taxed. Only other items produced for family consumption by families(knitten clothes, firewood, etc,) shall not be taxed. Used houses shall not be taxed but if the seller buys a new house, it will be taxesd at the going rate.
In 1999, Brookings, calculated that based on these provisions the initial tax rate would have to be 23%. The problem is, with such high taxes on consumption, we get less of it, and consequently, less production and the attendent problem of less personal income. In short order the tax rate would have to be at about 50%. There was no talk of exempting classes of so-called essential items or food types.
As for your ascertion that the personal exemption is a BIG, well, for those who work it certainly lowers the effective tax rate of the first several thousand dollars in income. But one does not “earn” income from it, unless of course one can take a child “earned” income credit. They are not the same thing as a BIG or “prebate”.
Then don't tax them. Period. Sure some people will eat lobster and others tunafish casserole. Big deal, unless classenvy is part of the problem.
Don't tax their house, either. (You'll collect on the furniture in the big houses, more than you can cram into a smaller one).
Do away with the prebate (and the army of workers to administer it), and taxes on food, primary housing, the energy to heat that housing, and medical care.
Period.
If someone wants a boob job, so what?
You just save them the trouble of going to a therapist who will say they 'need' it.