The FairTax when expressed as a sales tax on goods is 30%. And this rate is too low for several reasons described above in the FairTax Primer post near the top. It would end up between 40-50% in all likelihood.
Who said services too?
The FairTax bill taxes all goods and services, and also all state, local and federal purchases of goods and services including salaries paid to government employees and all of their fringe benefits. (except education)
you fail to mention all of the billions of spending that the underground people will be paying into the system because they will be forced to pay to by their goods.
According to the FairTax arguments, there is 22-23% of embedded federal tax being paid right now by everyone when they buy goods at retail. It just isn't visible. If the "underground people" go to Subway, the embedded tax is collected by the government. If they don't go to Subway, the sandwich isn't needed, the employee isn't needed and the tax isn't collected. So, there is no additional revenue being generated from these underground people.
The main place income tax revenue is lost now is when an employer pays cash for labor services to employees. This is still going to happen in the Fairtax scenario, people who are willing to break the law will still be willing to do so.
I believe the arguments you make are misinformation, but you believe them. Don’t know how you jump from 23% to 30-40%. Folks can come up with any rationalization they want that seems to make sense but the fact still remains that the founders never included an income tax for very good reasons. People have to be forced to pay a wage tax by turning over information about their personal lives which then in turn can be used against them by the IRS, and is done routinley to extract more money. And of course if you don’t pay, you go to jail or your bank account is taken. It flies in the face of the 5th ammnedment and that is a big reason why up until 1913 we never had any income tax at all. Your arguments are speculation and just not accurate. Ie, the underground econonmy...all of those billions that criminals and such spend to buy their stuff is now taxed! Much more revenue! Of course their services and wages are still not touched, but their spending is which will amount to a whole lot of money. Whatever doubts you have, that fact remains true.
Unless one is seeking to compare apples to apples rather than apples to oranges when comparing the proposed tax to the taxes it would replace all of which are commonly expressed on a tax inclusive basis ($.23 of each dollar spent) vs what you have left after the tax is paid (the current top income tax of 35% becomes more than 55% when expressed on that basis).
It's all explained in The FairTax Rate: a 23% tomato or a 30% tomato?
The rest of what Rob says I would take with a VERY large grain of salt as he is in love with the current income tax system.