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If you had read the FairTax legislation which comprises only about 140 pages you would have your answer.

The legislative architects of the FairTax were the beneficiaries of some incredible economic insight and brilliance.

The idea is the FairTax replaces all federal income taxes. Now think for a moment, all business taxes find their way into the retail price of a product or a service. In other words, consumers pay embedded taxes in every product or service bought at the retail level (not garage sales, used items, etc.). GDP is made up of more than 80% ccnsumption and consumption is where the retail buyer (the consumer) spends for consuming a product or service.

To answer your question we need to understand what it is that makes the FairTax ***transparent*** because that is key to holding back tax increases and thereby growth of government.

Take the example of a 2X4 piece of lumber sitting on the shelf of Home Depot at a price of $2. How much of that $2 is the result of federal taxes and compliance costs with federal tax filing? The answer is about 23%. The actual cost less all of the taxation up and down the supply chain for the 2X4 on the shelf is $1.54.

Now what the FairTax does is to ‘shunt’ all federal incomes taxes up and down the supply and production chains to the endpoint which is the consumer. The FairTax will charge a tax on that $1.54 2X4 equal to 46 cents and bring the out the door price back to $2. Now inclusive of the $2 the 46 cents accounts for 23% of the purchase. Exclusive of the $1.54 shelf price the 46 cents amounts to a 30 cents sales tax added. That’s a huge amount but that is what the government has brought into our pricing mechanism.

Now all of a sudden people can see what federal taxation has done to their ordinary daily puschases. A 30% sales tax is necessary to fund this bloated government at its current level of funding. This lifts the veil off the effects of the income tax in the prices of every day purchases.

This is a huge wake-up call and of course it is expected that the American consumer will be out for blood. This is a good thing.

And that’s by design. Because the FairTax legislation writes that Congress will vote on the Sales Tax rate once every year (National Retail Sales Tax = NRST).

So we can expect with near certainty that the American consumer will be pressuring their representatives to lower the NRST rate for the annual rate vote and that translates to less revenue for federal government and that means less government and less spending.

The other side of taking revenue away from the feds is to increase our exemption from federal taxation by increasing our rebates.

The two actions: 1) lower the NRST and 2) raise the rebate, both act as a pincer vise on federal government, like a lobster claw the federal government is held in a vise by the American people who can now see the whole picture; no more smoke and mirros, no more shell games.

Transparency is key and yearly votes will reveal who owns the representative in Congress. I will bet that member of Congress will vote to escape the wrath of the people.

I expect members of Congress to pass legislation to pull the veil again over the eyes of the consumer but I don’t think they will be successful once the American people have woken up to the con game that federal government plays with taxation.

The Income Tax must die. And that goes for the cancerous income tax called a ‘Flat Tax’.

Don’t presume I haven’t read it. Here are a few points I can think of right now.

I’m not so certain that “the American consumer will be out for blood”. Certainly the tax for that stick of lumber will be noticeable, but so will the “extra” cash in the wallet be noticeable.

Under this Bill the combined federal tax rate percentage is the sum of—
(A) the general revenue rate, 14.91 percent
(B) the old-age, survivors and disability insurance rate, and
(C) the hospital insurance rate.

As you point out, the tax rate is open to adjustment every year. The original income tax rate was low, look at it now. I would like to be optimistic that the rate would remain at this level or decrease, but that has never happened. It hasn’t happened because the fundamental cause has not been addressed: spending, specifically social spending. This Bill does nothing to address spending levels, but instead depends on “outrage” to restrict spending. I think Americans love their social programs, more than they hate taxation.

Moreover, with the exploding nanny state & the exploding importation of foreigners demanding government services which they perceive as a “right” - the pressure to restrain tax increases will be outweighed by demand for these social services. These foreigners are accustomed to high taxes and have socialist mindsets.

The “family consumption allowance” portion of the prebate calculation incorporates the poverty level as determined by Department of Health and Human Services. This is another opportunity for the overall “hit” to change. And the change will be by bureaucracy, not by legislators.

This Bill does not rid us of the 16th Amendment, an Amendment is required to repeal the 16th. There is nothing in this Bill which requires such an Amendment be first passed.

This Bill’s “prebate” continues the “progressive” ideas of the income tax. Indeed, if a person spends little (they barter/grow/make their own) their “prebate” will be more than the tax they’ve paid, they will pay less than 0% tax, which is a wealth transfer.

“The Income Tax must die.” I agree. It is an abomination in practice and immoral in principle. “And that goes for the cancerous income tax called a ‘Flat Tax’.” I agree. But a national sales tax - with or without a “prebate” gimmick - isn’t a solution either.

But most importantly, this Bill does not slay the leviathan.