I make pottery in my garage that I sell at craft fairs (I don't but for sake of argument). Will I be taxed?
No. As a licensed manufacturer, you will tax your customer on the price of your finished product, and forward it to the feds, keeping a small percentage as a fee.
[More or less as you are supposed to do now with profits under the self employment income tax rules]
It's new goods right? Will the clay I buy be taxed?
No, seeing you are a licensed manufacturer.
Am I buying it at wholesale or retail?
Licensed, wholesale, & no tax. -- No license, retail & taxed.
Who will determine that? Who will audit my sales?
Your friendly folks at the Fair Tax Enforcement Division, who formally worked enforcing the IRS code, -- who else?
Paying Taxes is painful, -- whadayaexpect, - some sort of utopia?
Your friendly folks at the Fair Tax Enforcement Division, who formally worked enforcing the IRS code, -- who else?
So then what have we gained? You are replacing one hated bureaucracy for another.