The prebate is a political hackjob done to try and get liberals to support the plan.
Ask yourself, would the average citizen feel MORE or LESS dependent on big government if every man, woman and child in America received a nice government check every month?
And then ask yourself, would future politicans be tempted to adjust the amount of this check for certain voting blocs in order to secure votes?
And would a 30-50% sales tax cause people to try and evade the tax? The remedy for that is a higher tax rate, causing more evasion. And then the reinstatement of the income tax on an emergency basis, only on the RICH people making say $50,000 per year and more...
Yes, the fairtax people are missing this basic psychological problem. It’s the same trick that credit cards use to get people to spend more money. You have the ‘money’ now and you get a cashback reward. You end up spending more money thinking you’ll end up ahead.
Lots of retail stores already evade the state sales tax by transacting in mostly cash and keeping it under the table. So of course we will expect more underreporting under a fairtax which focuses on this mostly cash business. Higher rates will be required.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus