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Here are a couple of my problems with this. And I'm as rabid anti-IRS as anyone. 1) what is the plan to disassemble the IRS? I've yet to see that. Until everyone on the IRS payroll have been fired as legal pick pockets, FairTax is only AnotherTax.

The Fair Tax sponsors are entirely against a consumption tax unless the bill adopted repeals the existing tax code at the same time. That is what the Fair Tax Act does, by its terms. Repeal of the 16th Amendment is a constitutional process that requires approval of the state legislatures. That would be done, too. The FTA even has provisions to assure that a super-majority vote would be required to raise the tax rate, but only a majority vote to lower the rate.

2)So no instead of only the poor and elderly getting a monthly entitlement from the government, now everyone will! What good will come of that? None! People vote for their entitlements. People who don't have entitlements are considered conservative.

The good purpose to be served is that NO ONE will have to prove their net income to the government in order to get the payment. And the payment itself is entirely necessary in order to make the Fair Tax sufficiently progressive with respect to low income households. Regressivity is the main line of defense of the Democrats who oppose anything except the income tax.

3) The proposal is that NEW goods and services are taxed. People will start buying used cars and garage sale microwaves which are not subject to this exhorbitant tax. This will put every business out of business except the secondary market.

I respectfully disagree with your conclusion that retail sales of new goods will be defeated and fail. Yes, some will take advantage of used goods. Fine. But that is done now, for those who wish to do it. Under the Fair Tax, new cars would be bought with untaxed earnings. The cost of making the cars in the U.S. would drop by about 22-25% as the taxes on labor are stripped out.

4) The burden of paying this tax is on the purchaser. Does this mean we have to save every receipt to prove we paid the tax? If a business can't prove that the tax was collected on something I purchased from them, then can the feds comes after me to pay the tax again if I can't produce proof that I paid the tax?

No, the seller is required to file returns and pay the tax. By that approach, only about 10% as many returns will have to be filed. Also, each retailer will be reimbursed a small percentage to cover his cost of compliance.

5) No matter how you cut this, it is a 30% tax, not a 23% tax. The tax is calculated on 23% of the total sale price of the [new] product or service. Since the sale price is inclusive of the tax, for instance an item that cost $1.00, the price has to be marked up to $1.30, not $1.23. Right now at my state's 5% sales tax, a $1.00 item is a total sale price of $1.05. The tax is added to the sale price. Not so with FairTax. The 23% tax is figured into the gross sale price. So a $1.00 item is now $1.30. 30 cents is 23% of $1.30. You can turn that sideways and longways but it is still a 30% sales tax.

You're right. The 23% rate is "inclusive" in the dollar spent, so on an non-inclusive basis the rate is 30%. Just like the stated rate of income tax, which is also stated on an inclusive basis. The rate is being worked over currently to adjust it to the current tax rates and economic conditions. The 23% may actually be reduced. But even at 23%, the advantage is no income tax, no compliance costs, no IRS, no risk of audit and back claims in case an auditor thinks your business is a hobby, no payroll taxes, etc., etc.

Convince me otherwise! :-)

I won't try to do so entirely right now. But I would suggest you stay tuned with an open mind, which you appear to have. If our great president is re-elected, as I expect him to be, we will see more of this reform legislation. And with Chairman Bill Thomas running the Ways & Means Committee, the Fair Tax Act may even turn out better than it already is.