Rob
For now I'm not going to disagree with your arguement that the savings in cost are not as high as "they" say.
I am still a big fan of the Fair Tax for several reasons.
#1. It reduces the legislatures ability and power to manipulate society.
#2. All of a sudden America becomes a big tax haven for business- as your great Friend NealB would say, all of a sudden Daimler/Chrysler becomes Chrysler/Daimler. It seems to me that this would drastically boost the economy.
#3. We will be suddenly gaining revenues from illegal immigrants, foreign tourists and diplomats, and all those drugs dealers buying 20 inch rims for their H2's and 300's.(a lot of money from folks who don't pay any taxes now) Will there be black markets? Yes but we'll have a whole bunch of former IRS agents looking for work who can go to work for Treasury chasing these down. It seems to me that enforcement would be a lot easier with Fair Tax than with any form of our current tax system.
Execpt for the future maniuplation of the prebate, the inclusion/exclusion of certain items from the tax for political reasons, and the raising of lowering of the FairTax rate, and the possible addition of an income tax at a later date as an extra tax, you might be right.
All of a sudden America becomes a big tax haven for business
This analysis is based on the same faulty analysis that told us "Keep 100% of your paycheck, prices will stay the same, and we'll send you a happy check every month". I don't trust it or believe it.
#3. We will be suddenly gaining revenues from illegal immigrants, foreign tourists and diplomats, and all those drugs dealers buying 20 inch rims for their H2's and 300's.(a lot of money from folks who don't pay any taxes now)
That's another mis-represntation, these people are paying the 22-23% embedded costs of our present tax system with every single legal purchase they make now. They are also employing Americans when they buy our stuff which enables Americans to buy more stuff.
We will still not be collecting taxes on their illegal activities just like now.
Listen, I wish it were true too-- it just isn't.