A business existing to buy food simply to consume it would never stay in business because it would not benefit anybody and is a ridiculous premise.
Are you dense??? I'm talking about foisting off personal expenses on a business account. People do it all the time. I know people who drive cars registered under their business', boats, computers, you name it...
And just why is that done today under the income tax??? Obviously because a lot is evaded in personal taxes. The evasion is more beneficial under the income tax than it will be under the FairTax since the marginal rates are higher under the income tax.
If today your personal marginal rate is, say, 15% that means you are actually paying 15.0% plus 15.3% in payroll taxes or 30.3% tax inclusive - that's more than under the FairTax by a good bit. Obviously if you're in the next bracket up (25%) you'll be hit with over 40% ... and that's STILL tax inclusive.
With the FairTax, no one would ever pay the full 23% of their income since income is not taxed - only consumption of retail taxable items; in fact, most would pay substantially less. the upshot of all this is that there is massive evasion going on today - particular if you also add that from the illegal economy - and it is far more than could possibly occur under the FairTax.
If that same lawbreaker under the income tax who was buying personal consumption through his business were to coninue doing so his benefit would be much smaller - less than 23% instear of over 30% - and the likelihood of being detected would be even greater than at present since instead of looking at a potential 120 million "points of interest" there would be fewer than 20 million with substantial resources that are experienced in just that sort of evasion under state taxes.
If the evasion rate of these folks would continue at exactly the same level, the government would lose LESS to the evasion than at present. In fact they'd probably have a sizeable gain in tax revenue since the illegal economy will "contribute" when they buy taxable things at retail and they do not do so now.