It's an administration issue. How are you going to track when someone has spent up to the necessity level every month?
It's easier to just cut a check and tax everything at the point of sale.
Of course, the upside for taxpayers, is that every time we make a purchase, we are reminded of the true tax rate. It isn't hidden by withholding, or being built into the cost of the product.
It's a revenue neutral plan, the total tax burden is just frontloaded so that we can all see it. read it, it's really pretty cool. --fairtax.org
it will also create lots of opportunities for fraud and abuse. Several people will try to get more than one check once you have this new attitude of "who cares who you are-just take the check"