Have you had a chance to review The FairTax Book, written by Neal Boortz and John Linder? It deals with many of the points that you raise.
I am interested to hear about how you believe the FairTax would impact repatriation of corporate funds as well as overall job creation in the US.
One thing that you don't mention is one of the biggest benefits of the FairTax, the huge decrease in compliance costs on the parts of the government, US taxpayers and US companies. What type of value to you place on the compliance costs of individuals, businesses and the government both before and after the implementation of the FairTax?
In addition, in reading your comments about people evading taxes by purchasing overseas, I find it difficult to believe that this would happen. First of all, if the embedded taxes are removed from the cost of our goods, this will offset the sales tax and the price of goods in the US will remain nearly the same.
While I will admit that some luxury items have been purchased overseas in the past, particularly in the Caribbean, I find it very difficult to believe that overseas consumption would be more than a small fraction of all consumption due to the inconvenience and relatively small price difference possible on general goods.
Finally, any overseas purchases would be offset to some extent by the consumption by tourists visiting the US. I am not sure whether this would end up being a net increase or decrease in tax revenue. I doubt it can truly be tested because you should only count purchases made overseas when that was the specific purpose of the trip. I have a hunch that if after-tax prices remain relatively neutral, we would see a net gain from tourists to our shores.
You also mention that the poor would be punished due to the FairTax even though they get the prebate. I don't see how this is possible if the payroll (OASDI and HI) taxes are removed from burdening them. Can you explain this further?
One last thing, you mention that the sales tax rate should be quoted on a tax exclusive basis of 30%. The only correct statement that can be made on this subject is that is should be quoted in whatever method is used to quote the income tax that it would replace.
For example, if you would like to quote the tax exclusive rate of 30% sales tax, you should also quote the tax exclusive rate of 39% for a "28%" tax inclusive income tax rate [i.e. 0.28 / (1 - 0.28) = .3888]. Otherwise the 23% tax inclusive rate compares directly to the 28% tax inclusive rate used for income tax purposes. As long as you keep both rates on the same basis, it is a fair comparison.
I'd love to hear more comments about these issues and the FairTax.
