Its fun to think about the "what-ifs" of this kind of tax scheme. How would our lives change?
First, the government wants it because it generates a one-time acceleration of tax collection, and a tax increase! A huge fraction of our economy is conducted via debt, in other words, purchases of goods and services with income NOT YET EARNED (the tax pull ahead). Pay the tax on the purchase, and it is collected well before the earning takes place, EVEN IF THE DEBTOR GOES BANKRUPT AND DEFAULTS ON THE LOAN (the tax increase), and never earns the "income". You are now taxed according to what you can borrow! If the government loved having people in debt before, you ain't seen nothin' yet!
Which leads us to:
Second, the banks and credit card issuers have to love it! A 23% increase in every purchase translates into a rapid rise in credit balances, as people think their increased take-home income allows them to consume at the same rate. Higher balances equal higher interest payments, as we pay interest ON THE TAXES WE PAID! This will do much more than offset the small administrative cost of sneding the money to the feds.
And a third: travel outside the country will represent consumption outside the tax jurisdiction. (Today the US taxes your income no matter where in the world it was earned.) So Congress will move to create all manner of charges for foreign travel, calling it "taxing the rich."
Come on now, you all can think of lots of fun things about this tax, can't you?
What indicates to you that prices will increase?
THe nrst is not "in addition to" today's prices... the nrst only replaces the same taxes you pay when you buy a product or service with a visible tax.
I tend to think that individuals spend their own money more wisely than "the government" spends it. The Fair Tax would achieve that approach to a much greater extent than our present tax system, which picks favored parties and expenditures in many cases. Your comments primarily describe situations that would occur only if people do not change their attitudes in light of changed circumstances. Prices will change and people will change their conduct based on this radically improved tax system, and we will all be better off for it.
"Come on now, you all can think of lots of fun things about this tax, can't you?"
Sure can, such as
(1) dramatically reduced trade deficits,
(2) dramatically reduced federal budget deficit,
(3) significantly increased GDP growth
(4) unemployment down significantly
(5) much less administrative burden on individuals
Those are just for starters.