So, explain to me how a 10% savings for the employer is bad. Explain to me why the employer would need to cut my pay down to my post tax levels in order to save money. Explain how getting my full paycheck is a bad thing. I think we can debate the black market as a reasonable possibility. I'm just not real clear on your other points. Enlighten me please.
I'm not going to repeat it all, search FR for Linder and look at the Open Letter from two days ago, the whole debate is already covered there. If you have questions after reading that, we can discuss.
The fallacy is that you get BOTH your full income AND a 20%+ reduction in prices if you adopt the FairTax. The SOURCE from whose research that fallacy was created has apparently confirmed that his research was MISREPRESENTED: you can't have BOTH, you can ONLY have ONE - either your full paycheck OR reduced prices.
To directly answer your question: IF you want prices to drop by 20%+, you MUST reduce your gross pay. If you want your full gross pay (plus the employer paid FICA taxes) you DO NOT get reduced prices as claimed by the FairTax proponents.
There is nothing "bad" about a 10% savings. It just isn't enough to pay for all the claims the FairTax proponents make.