The 'business cost' exception looks like a vehicle that everyone with an account will be able to drive complete tax avoidance through. That bothers me. Further, I'm not interested in a tax that replaces the 2+ Trillion dollars the government takes, I want them to take much less. Instead of a general sales tax, which they would continually lever up like they did the income tax (have you ever seen the original, 1913 income brackets and tax rates?). I prefer something along the lines of our original system of excise taxes to fund the federal government. This puts the final control over government purse strings in the hands of consumers by allowing them to adopt alternatives and curb egregious taxation.
I don't dispute that a consumption based taxed is superior to an income tax, but I don't like this proposal because the flaws are too great, imo.
Repeal the 16th amendment and enforce the 13th. End the wealth transfers and you'd cut over half the government spending in one stroke.
Of your first complaint, for every product bought for business purposes would have to be accounted for. If things are being bought tax-free but not being re-sold, something's fishy and they're subject to audit. What's more, the most likely enforcement system would have EVERYBODY pay the tax at the counter, with businesses able to recieve a check for "taxes paid" that month.
On your sec0ond complaint, the size of government, the FairTax actually restricts the size of government. goods and servicces purchased by government entities WOULD be taxed. This would encourage outsourcing and privatization of government busineeses. Purchases made by the Post Office or Amtrak wouldn't be taxed if they were spun off and privatized, as an example. And it would work at all government levels too. What is a state going to do when purchases made by a public school are taxed while purchases made by a private school are not? And remember, tuition isn't taxed either. So what would be the most economic course of action in this case? Give everyone a voucher. There are thousands of examples, at all levels.
Regarding excise taxes, the FairTAx IS an excise tax, only applied to domestic and imports. Even if we spent only spent $500B, which we would spend if we only spent on programs specifically outlined in Article I, section VIII, we would need almost a 100% tarriff on all imported goods. That is literally impossible.
Regarding the 16th-- It's repeal WOULD NOT prohibit an income tax. It's repeal would only make an UNAPPORTIONED Income tax unconstitutional.
Regarding the 13th, that regards slavery, and I thikn it's enforced fairly well (sarcasm). I think you may be referring to the 10th amendment, which states:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."
The only problem with that is FDR's court packing scandal stretched the commerce clause so bad that virtually anything is within the domain of the Feds.