Bravo Sierra. When he buys something for $100 and pays a 6% state sales tax, he knows he pays a total of $106. Your approach is highly deceptive.
And that $100 was already reduced by at LEAST 7.65% or 15.3% if you want to count the DIRECT or COMPLETE FICA withholding.
And that crane worker also probably paid at least 15% in income tax.
So that $100 he has now really started as $128 or $139, depending if you want to count the employer's contribution to FICA or not.
Or, if you're like me and self employed, you get to pay that 15.3% directly...
To me, it seems darn near equal. $130 for the FairTax, and either $128 or $139 for the current system. With a lot less complexity. And it does NOT penalize investment income OR make savings less attractive for companies (allows companies to roll-over cash from year-to-year without penalty, eliminating a lot of the overhead for lease-to-own offers).
I'd support the FairTax completely if it would also do the following:
1. Abolish the IRS and ELIMINATE that portion of spending from the Federal Budget. Do not reallocate the dollars, just cut them. That alone puts a good sized dent in the deficit (about 15% of the current estimated deficit).
2. Eliminate the Prebate. Completely. It's a dumb idea, and would take a lot of work to process.
3. Anything regulated by the FDA - food, drugs, etc - are exempt from the FairTax. Your basic needs - food and medicine - are not taxed.
4. Mortgage payments are exempt from the FairTax. Your mortgage company will not charge the tax.
5. Cut the FairTax rate down to 27%, which would result in a 10% reduction in revenue to the Government. Give them less!
I think you add those small tweaks, and you have a winner. Lower tax rates for everyone once you look at the ACTUAL rate people pay, elimination of one of the biggest, oppressive and most intrusive government agencies out there, and simplify taxation. No form needed, no paperwork/checks sent out to process (and account for) monthly, and no change to the benefits regarding home ownership.
PS: I'm expating to Asia - where are you located?