Ask landscapers, roofers, drywallers and other trades whether they are already being undercut by illegals avoiding the current tax scheme.
There is no perfect tax; there are just some that are “better” than others.
Personally, I’d rather a system that takes a % off the top at the source than one where I and every other individual and business entity spend hundreds of hours a year in paperwork and thousands more in accounting services to satisfy the government enforcers.
which is where the fairtax scam fails utterly.
In order to know where the sales are, the IRS(whatever successor name) will still require the constant access and audit power. They will even, based on prior behavior, impute the level of business you should have and should pay.
Instead of 50 employees being the ledger, it will be all the individual transactions. Much more paperwork than simple quartly deposits.
Past history will show how easy it will be to avoid taxes. Those with the means will do so easily, frequently, and totally legally. This will shift the tax to the middle class where the prebate will now move dependence on a goverment check up the ecconomic scale. Nancy Pelosi and Ted Kennedy will be happy.
but it is much easier to have a very low rate with an income tax than dump everything on a fair tax and have a much higher rate as a result.
A high rate means a bigger underground economy.