That's a point that the fair tax people can't figure out; those of us that have worked all our lives, paid income tax on our savings, much of which wasn't tax sheltered.
With the fair tax we'd have to pay tax on it again, at least on the principal.
I hesitate to try and paraphrase the "solution" for fear of misrepresenting their argument but basically it was "the price of everything will go down so much that it'll be a wash". Gee, thanks, like I really think that's going to happen.
I do agree that the current tax code is a mess but the big problem is that the goobermint simply spends too much of our money and there's NOTHING that would keep them from raising that 23% to 33% or more and if they don't do that spend it anyway.
It's what happens when dummies want goobermint to take all their money and "take care of them" and until this country gets stuck off stupid it's not going to stop, regardless of the collection method.
Only consumption is taxed - and not all of that even ... and not all of your income is spent for consumption since many non-consumption items are not taxed.
You should read the bill - or use the FairTax calculator from the Pennsylvania FairTax group which outlines many of the things not taxed.