What you're forgetting is that if you don't have to pay self-employment tax, social security taxes, etc., on the money you're getting from your clients, then you will be able to afford to reduce your rates significantly. Add the Fair Tax back in and your rate will stay the same or rise only slightly.
Tell that to the FairTax people, they are the ones claiming that any income and payroll taxes are the property of the person who was paying them, not part of the businesses way to reduce costs.
What you are saying is logical, just like saying wage earners won't need the extra money because prices won't go up, so the business will keep them. But the 100% paycheck guarantee is in place, and once you extend it to the wage earner, you need to extend the same rule to personal taxes paid by a business owner on the profits of a business. After all, the business owner could just as easily structure all of his profit as wages, and be a wage earner for all intents and purposes, leaving zero profits.
I agree that your take is the way it was intended to work, but this is not the way the plan is being sold.