The Fair Tax is better than what we have.
The **best** plan would be the 50 state plan.
The federal government sends our 50 tax bills, one to each state. The size of the bill is set by the number of people over the age of 18 ( determined by the census) living in the state.
Let the states figure out how to collect the tax. With 50 state, eventually, the most efficient, least intrusive, economy friendly, and least expensive to collect for the citizen and the state, would emerge. In fact, the states would compete with each other to have the most efficient, least expensive to administer and collect, and compassionate plan to collect the taxes.
A flat tax will never happen. It would remove the ability of politicians to hand out political favors and punish their enemies.
I like your 50 state plan.
All Federal expenses are apportioned by population, and the States are responsible for collecting them. 50 little laboratories. Some will opt for a flat tax, some a sales tax, some an oppressively progressive tax.
As you say, the states that do a bad job here will either improve or lose their productive population and businesses.