If you realize that even with what appears to be zero income tax you still actually pay some income tax that is hidden you are far ahead in understanding compared to many taxpayers.
Does the FairTax raise the same revenues for the government""So, my income increases (income and Soc Sec taxes now zero), prices will fall (that's what you mean by increased purchasing power) and I get a prebate?
The answer to both points is yes (but it's really not your income that increases but your DPI - disposable personal income or purchasing power). At the 23% tax inclusive rate presently in HR25, the FairTax is revenue neutral as several different economic studies have shown. Keep in mind that the FairTax base of consumption is much greater than the income (wage) base. Roughly the same percentage rate in each (both are expressed in tax inclusive rates) yields more revenue under the FairTax than under the income tax due to the greater base.
The real concern is that with the economic improvement that comes with the FairTax, the rate will most likely need to be lowered before too long so that too much is not taken in ... and it'll be up to us as voters to raise hell with the congressmen to keep government from raising spending apace. We'll need to be hard on them to reduce spending as well as reduce the tax rate. Both will be possible.
Yes, I realize you weren't referring to state sales tax.
The answer to both points is yes (but it's really not your income that increases but your DPI - disposable personal income or purchasing power).
So, DPI increases, prices fall and government revenues stay the same? And I get a prebate. Still sounds like a free lunch.