LOL! We are starting to see that the FairTax would really be one hairy POS for home businesses and small startups.
Especially for those that are looking to maintain their ability to tax exempt expenditure for personal/business use items.
It is indeed interesting to watch the panic of folks who say a retail sales tax will increase tax evasion because it cannot be enforced are also the same ones who also claim how horrible it will be to actually be required to able to demonstrate they are a business for-profit and not a hobby.
Clear enough to see why one might prefer dealing with an income tax system with 10 times as many filers to hide from an overburdened IRS.
Especially for those that are looking to maintain their ability to tax exempt expenditure for personal/business use items.What you are saying to me is that, even though my freelance work was a legitimate business and not a "hobby", under the FairTax I would have had to show a profit for 2 out of 3 years before I would qualify for the "business use" tax exemption - and then only if I use the item I bought almost exclusively for business.