"... nearing retirement, I have considerable after tax savings that would suffer an immediate haircut in value due to the change in tax on income vs. tax on spending ..."
Let's take a look at that and get some idea of what might happen:
Let's assume your and your wife have an $800,000 savings account and that when you go on S/S and retire you'll receive about $21,600 per year. If you invest your savings and earn 6.25% annually this would give you an annual income of $50,000 plus the S/S or $71,600 - none of which income is taxed. With a reasonable assumption of things not taxed under the FairTax of $17,900 - which may even be low - let's say you spend the rest on taxable consumption giving an effective FairTax rate of 14.61%.
The untaxed things are expenditures such as such as:
1) Mortgage payments (p&i both). 2) Other loans and credit cards (p&i also). 3) State and local taxes including property taxes. 4) Educational tuition payments. 5) The entire amount of savings/investments. 6) Money contributed to church/charity/political organizations. 7) Money given as gifts to others. 8) Used items such as real estate, cars, furniture, etc. on which tax had already been paid.
Most likely if you remained under the income tax only the $50,000 in investment earnings would be taxable (depending upon the type of account and intervening changes in tax laws) and that would put you into a fairly low income tax effective rate also - something like 15.88% (higher than the FairTax effective rate) so that the "haircut" would not be as great as you might fear - and you have the advantage of lowered prices under the FairTax and no government mischief to alter what might be taxable income - perhaps a larger chunk of S/S to be taxed by that time ... who knows. In fact with some different information you might do even better.
Also keep in mind that under the income tax you will be paying an additional tax amount in the form of higher prices - an amount that FairTax opponents have stipulated as 9% - on everything that you buy (even the S/S funds) - whicvh would make your income tax effective rate 24.88%.
And keep in mind that the effective FairTax rate is not paid except when you decide to consume taxable items. Your annual prebate would be $4,508 so it would obviously be to your benefit to try to even increase your savings under the FairTax were that possible.
Let's assume the current income tax scheme. I take the $800,000 in savings and buy tax free municipal bond fund (APX currently paying 5.7%), I get $45,600 tax free, plus the $21,600 S/S I'd have to pay tax on at 28% rate or $6048, for an effective tax rate of 9%, considerably better than the effective FairTax of 14.6% you calculate.
But I want to buy a boat, now that I'm retired, and have a nice nest egg, and time to enjoy myself. I take $200,000 of savings and buy a nice new cruiser - and will not have to pay the $60,000 or so FairTax on this purchase.
Your list of untaxed expenditures is very strange. It would be quite revolting were the government to start taxing loan repayments, or money put into savings.
Also keep in mind that under the income tax you will be paying an additional tax amount in the form of higher prices - an amount that FairTax opponents have stipulated as 9% - on everything that you buy (even the S/S funds) - whicvh would make your income tax effective rate 24.88%.
The supposed higher price built into things due to income taxes is a debatable point. If industry still pays its workers their current pre-tax pay, rather than their current take home pay, there may not be any significant reduction in pre-FairTax price of products. To be fair, industry ought to raise workers pay by the payroll taxes the businesses would be relieved of having to pay, since the workers will now be paying that tax. Doubt that will happen though.