I still don’t like any tax that is not collected by government directly.
Sales taxes are sneaky. The get you a little bit at a time. No one ever keeps all of their receipts and adds up the amount of sales tax they pay over a years time.
I also do not like the fact that a merchant has to collect these taxes and forward them to the government. This places a burden on the merchant that he should not have to bare. The merchant spends his time with record keeping, filing forms and sending the check to the government quarterly. The merchant is also subject to audits and is in jeopardy for fines and imprisonment for failure to file the forms on time or submit payment on time.
Taxes should openly and acutely painful for the payer so that he is well aware of what government is costing him. If there is pain endured by the citizen when he pays his taxes he will let his representative in government share his pain with him and hopefully tax increases are therefore rare.
Does the FairTax burden the retail industry?
All businesses are tax collectors today. They withhold income and payroll taxes from their employees. Moreover, the vast majority of retail businesses operating in states with a sales tax (45 states currently use a sales tax) are already sales tax collectors. Under the FairTax, retailers are paid a fee equal to one-quarter of one percent of federal sales tax they collect and remit. In addition, of course, retailers no longer bear the cost of complying with the income tax, including the uniform capitalization requirements, the various depreciation schemes, and the various employee benefit and pension rules. Finally, the economic growth resulting from the aggregate, beneficial effects of dramatically lower income tax compliance costs and no payroll or income taxes, customers having substantially more money — the greatest influence on retail sales — and a reasonable fee for collecting the FairTax, all ensure that retailers do quite well.
http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#24