How so? I’don't understand your reasoning without more detail.
Poverty level where? Mississippi? Silicon Valley? Where you are makes a difference in what constitutes enough to scratch by. Just take a peek at the variation in per diem rates permissible under the current tax system, and the wide variety in what the allowance for food is under those rates. Supposedly, they are adjusted for the business traveler, dependant on location and the cost of eating there.
Using that example, the poverty level (national average) prebate of taxes on food is going to be woefully short in some locations, and long in others. So, it is unfair.
Now, if you are a diabetic, you will need more in medical supplies than someone the same age who is in good health. It really isn't optional. Without your shot you enter a coma and die.
How is it "fair" to tax that? How is it fair to tax medical oxygen?
If you get in a car accident, even one which is not your fault, you get taxed on top of having been creamed by some nitwit? Sorta adds insult to injury.
If you are a paraplegic, your wheelchair will be taxed, and any other special equipment you require. If an amputee, your artificial limbs. Your lot can be rough enough without having to pay even more, without being taxed on an arm or a leg.
This is a short list of things which are really not optional.
There are many more. Your Poverty level tax prebate isn't going to come close to refunding your taxes on these items, and they are not things you can decide not to purchase. That just isn't fair.
Some states currently do not tax food items, and it would not take much to program in at the till what is taxed and what is not. Happens all the time.
Also the wealthy spend much more on unprepared food, clothing, housing, and medical care than do the poor. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit.
I think I addressed medical care already, but I will add that part of the reason those who can afford medical care pay so much is that they are picking up the tab for those who cannot afford it. The poor pay less, because the hospitals get stuck with the bill, or the Welfare picks it up. On other items, such as unprepared food, housing, clothing, it is because they can!
(For starters, I did not think this was a beat up the rich sort of deal, but maybe that is what propels it. )
Everyone has to eat, everyone has to live somewhere, and the only thing which puts a lid on that price-wise is their own appetites and budgets.
(Notice I did not include clothing in the list of things not included that I proposed--the variation between what is considered "necessary" is immense, and anything past enough to keep you from dying of exposure or getting hauled off to jail is of "necessity" only depending on your economic bracket. Pay tax on your clothes, and that from someone who lives where subzero temps are quite common in winter.)
I did include energy, though, and depending on where you live work may be an elevator ride away, someplace where there are no options for public transportation. What you put the fuel in (fuel is already taxed, BTW, anyway) is up to you, and fair game to be taxed.
Again, home heat, here anyway is not optional. Unless you really ramped up the clothing budget, and use an outhouse instead of a flush toilet, it is a good thing to keep the frost off the walls. In other climes, people would argue that air conditioning is equally important. If you use less, you pay less, anyway, and iirc, that energy is already taxed--another tax the fair tax would not eliminate, so eliminate the taxes on taxes.
As for the rich spending all that money on nicer than necessary necessities (Prime Rib instead of Hamburger Helper), where does that money go?
Ultimately, the money spent on what the rich or poor spend it on goes into the pockets of the people who provide these things.
They in turn, do not stuff the mattress with it, but spend it. Not all of it will be spent on the exempted items I proposed.
At some point, it will be taxed.
Even using the internal rate of 22%, allowing that .78 of that dollar will remain after the first time it is spent, that dollar will be whittled down to less than a penny by the 18th time it changes hands. It drops below a dime on the tenth taxed transaction.
I think the government can wait one transaction more to get that fraction of a cent difference. The rich buy a big house to live in--primary residence. No taxes on that new big house.
WHAT? EGAD, you're going to break the government
--not!
The people who built the house will spend the money, and you can tax it next time. Then the rich will have to fill that big house with all sorts of things which are fitting for such an abode. You can tax them then. The amount they spend on furniture, etc, will put money in the coffers.
The hired help will get paid, etc.
The poor man builds a house, it is smaller, mainly because he either cannot afford or does not want a huge place. He buys less to put in it, and the government gets a proportional share of that.
As I said, what he spends on that new, primary residence will be taxed down to under ten percent of that amount by the tenth time it changes hands anyway.
But that raises another concern. If the Government reduces the money supply to 10% of its former self by the tenth transaction, who is going to have any money?