The problem that this ran into is the smaller retail shops, about 90% of the shopping places. In order to be sure all sales taxes collected are passed on, there is a need to impose draconian controls over these shops and even they they would not be effective.
I am just telling you why congress isn't entertaining it.
Worries about cheating will doom an easing for small business. The reform panel recommended that companies grossing $1 million or less report their income and nearly all of their expenses on a cash-flow basis. Simpler reporting would come with a catch: Special bank accounts would be required. Firms would have to deposit all receipts into them and pay business expenses from the accounts. Banks would give a summary at year end to firms and the IRS, which could then compare the reports with amounts shown on tax returns. But even that system isn't foolproof. Taxpayers could still evade tax by not putting receipts in the accounts.
It makes the difference in many elections, and will continue to do so. Ask Bob Barr. Hell even ask Johnny Isakson who won without strong support but was surprised by a very strong showing from a complete unknown based solely on support of the nrst.... Hermann Cain.
'Course, Georgia is the most aware state - so Georgians are all about passing the reform. So are our pols, unless they are not fully informed or are marxist dems... cuz this is the death knell to unbounded growth of goverment.
"I am just telling you why congress isn't entertaining it."
No, you aren't. Compliance under the FairTax would be higher than the current system. The reason that many in congress resist the idea is that the FairTax would be the largest single transfer of power out of DC back to the American people in the history of the republic. The political ruling class could no longer use the tax system to reward friends and punish enemies. That chills some of them to the bone.