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For me the purpose of federal tax reform is to reduce the power the federal government wields over our economy and our lives. Their power stems largely from how much money overall they take away from people through taxes and how they spend that money and this is the factor that is specifically not reformed through the fair tax "revenue neutrality" assumption. Yes I know they also wield power through tax incentives, etc but I believe that is insignificant compared to what they spend on entitlements and everything else. To me, any reform that does not reduce overall revenue to the federal government as part of its primary aim is not reform.

Second, I fear that the federal bureaucracy that would be needed to calculate, disburse and adminster a monthly "prebate" of sales taxes to citizens could well dwarf the IRS in intrusiveness, size and control. It seems to me, to be fair, the government would have to have detailed information about people's incomes and purchases and life circumstances such as illnesses to correctly figure out how much each citizen deserved to be prebated. Such intensive and personal monitoring of individuals would be no improvement over the IRS which most people now only deal with once a year. Any reform needs to simplify and reduce the need for government to have detailed, personal information about each of us and it needs to reduce the government's monitoring of our lives. I do not see how the fair tax meets that test.

I am a true believer in tax reform but the fair tax does not appeal to me as reform for two reasons: first it has as its main assumption that it will be revenue neutral and second it will require a massive federal bureauracy to run its monthly rebate program to taxpayers.

Size of the federal bureaucracy is an understandable concern. There are some points as to how The Fair Tax will reduce the bureaucracy you need to consider. There are currently 140 million individual tax filers with the income tax. That figure will drop to 20 million businesses filing the consumption tax collected from purchases. Such a dramatic drop in filers will allow for a considerable drop in size of bureaucracy needed to monitor The Fair Tax. Another factor that will reduce bureaucracy is The Fair Tax and it's 133 page tax code will replace the 67,000+ page tax code by abolishing the IRS. The existing Treasury Department will administer the consumption tax.

Their power stems largely from how much money overall they take away from people through taxes and how they spend that money and this is the factor that is specifically not reformed through the fair tax "revenue neutrality" assumption.

No tax code is designed or can be designed specifically to address spending. However The Fair Tax does reduce spending to some extent by abolishing the IRS and its $11 billion dollar price tag. Also you need to also consider The Fair Tax will collect tax money from a much larger number of people(310 million) than the income tax (140 million thereby reducing the tax burden on each individual more than the income tax. Another advantage to The Fair Tax is that people will be able to see the tax rate as it will be itemized on each receipt. People will be able to see any change Congress makes as opposed to the unseen changes for the hidden taxes with the income tax code and therefore more likely to speak up against any changes. Congress will be less likely to make a consumption tax rate too high as it will only encourage people to reduce their purchases. Reduced purchases results in less taxes collected by the Treasury and will force Congress to reduce spending. Congress can only maximize tax collection by keeping the rates within reasonable boundaries. Founding father and first Secretary Of The Treasury Alexander Hamilton pointed out this concept in his Federalist paper #21. To quote:

It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed-that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

It seems to me, to be fair, the government would have to have detailed information about people's incomes and purchases and life circumstances such as illnesses to correctly figure out how much each citizen deserved to be prebated.

Income will not be a factor to determine the size of the prebate. The size of the prebate will be determined by the Department of Health & Human Services’ poverty level guideline multiplied by the tax rate and is based on family size as you can see from the chart below. Fair Tax FAQ #3

Such intensive and personal monitoring of individuals would be no improvement over the IRS which most people now only deal with once a year.

The IRS requires people to fill out a multitude of forms detailing every aspect of a person's life. No system could be more intrusive. Contrast that with The Fair Tax that will not require any tax forms. You will only have to fill out a form for the prebate but it will not require near the detail demanded from the IRS.

At birth you are required to get a SSN.
Start school and your address and guardian addresses follow you for the next 12 years correllated to your SSN.
Get a job and your address and income are correllated to your SSN.
Buy a home and your credit and loan data is correllated to your SSN.
Everywhere you turn your identity is recorded.

Where do you plan on hiding your identity in a normal, routine life in the US in the 21st century?

The only people the Feds can’t find are illegal aliens.

The FairTax as written may not be the answer to the tax problem, but it is a step in the right direction. That direction is to tax the use of money rather than the labor of creating wealth or income.

I read an article by a proponent of a consumption tax in the early 90’s that I no longer have. However, his position, as I remember, was to tax every transaction. Receive a paycheck, deposit a paycheck, withdraw money, pay bills. However, the rate he proposed for Texas, as an example, was 1/4% which would eliminate all current sales, property, business and other taxes and create twice the then current tax revenue. That would mean an individual would pay no more than 1% of their income, at the most.

There would be no IRS tax forms to complete. The federal bureaucracy would be moved to the current state comptroller’s office for collection as it does state sales tax.

Consumption tax has too many advantages to dismiss. Every form of it should be studied and analyzed to provide a platform for elilminating the yoke of slavery imposed by having one work to pay the Boss (the Feds).