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Oooh, such a picturesque world you present... My predictions: 22% of small businesses go under in the first two months of FairTax as all utilities, rent, leases are taxed at a 30% rate, followed by half of small business dying within the first year. Credit card transactions come with a built in fee to cover the tax portion of the bill as remaining small businesses try to not lose any more money.

As small business represents the largest segment of employment, the economy immediately spirals into the largest recession in modern US history. New home sales tank as the 30% tax immediately improves the value of any used property. Used car lots become the thing to invest in as new cars overnight go up in price by 30%. Employer provided health insurance immediately tanks as that too goes up 30% overnight.

On the plus side, an incredible resurgence in the value of not making disposable products and re-creating the appliance repair market as repairing an item finally once again becomes cheaper than replacing it. Imports drop dramatically as people seek out repairable products, and look more to durability than to price.

Economies in the most liberal of states with the most stringent of requirements for employers tank the hardest, especially in RomneyCareLand where required health insurance no longer has the stick of denial of personal exemption from tax returns - it's cheaper to not worry about the exemption than it is to pay the tax on health care.

And six months in, Congress is faced with an incredible flood of cash, the largest they've ever had, as the ill thought out FairTax rate proves to far exceed government expenditures, leading to even more socialization with a New New Deal supporting liberals to one of the largest landslides in election history as people throw out the people who brought this inanely huge tax rate onto every purchase, everywhere.

My predictions: 22% of small businesses go under in the first two months of FairTax as all utilities, rent, leases are taxed at a 30% rate, followed by half of small business dying within the first year. Credit card transactions come with a built in fee to cover the tax portion of the bill as remaining small businesses try to not lose any more money.

Guess again. Business to business taxes will be abolished. Fair Tax FAQ #1

New home sales tank as the 30% tax immediately improves the value of any used property.

Fallacy #2. You forget several key points. The effective rate(after the prebate) will lower the tax burden as people will not be taxed on necessities up to the poverty level. Only the wealthiest of the population will pay close to the maximum rate but they will be able to afford big ticket items. People will have more purchasing power with the elimination of federal income taxes from their paychecks. Interest rates on mortgages will drop due to the elimination of corporate taxes and much lower compliance costs. Businesses will be forced to pass those cost savings onto the consumer or lose business to their competitors.

Used car lots become the thing to invest in as new cars overnight go up in price by 30%.

This ignores the facts any used time has a much shorter life span than a new item. People will be able to afford new cars for the same reasons states above for homes.

Congress is faced with an incredible flood of cash, the largest they've ever had, as the ill thought out FairTax rate proves to far exceed government expenditures, leading to even more socialization with a New New Deal supporting liberals to one of the largest landslides in election history as people throw out the people who brought this inanely huge tax rate onto every purchase, everywhere.

The only point your missing is the fact The Fair Tax is revenue neutral It will collect the same amount of tax as the income tax. Fair Tax FAQ #6. No more and no less. You should read the The Fair Tax Act Of 2007 and read information at the Americans For Fair Taxation website before making anymore wild assumptions that clearly reflect you don't have any knowledge about The Fair Tax.

As small business represents the largest segment of employment, the economy immediately spirals into the largest recession in modern US history. New home sales tank as the 30% tax immediately improves the value of any used property. Used car lots become the thing to invest in as new cars overnight go up in price by 30%. Employer provided health insurance immediately tanks as that too goes up 30% overnight

My contention also.

We've seen how the home sales market affects the economy in general. The Fair Tax will kill it.
New construction and the auto industry will die.

Anyone who thinks mfgrs. will pass on their savings in 'hidden' taxes to the consumer are smoking some good stuff.

I give you, as an example the 'sugar crisis' circa mid 70's.
Sugar prices went sky high.
Soft drink companies raised the price of a soft drink exponentially, including artificially sweetened drinks.
When sugar prices returned to normal, guess what, soft drinks stayed at their high levels.

I contend the same logic will be used again by companies.