The "Prebate" in the Fair Tax gives too much power to the politicians because it opens the door to wealth redistribution on a national level.
For those who don't know, the prebate would remove the tax burden from all Americans, up to the poverty level, for the basic necessities of life. How does the Govt determin the poverty level? They use national income data. The example the Fair Tax people give is that a family 4 (2 adults, 2 kids) would receive a check of 500-600 dollars each month to cover the taxes on the basic necessities of life. They say that the Fair Tax is the only Tax system that completely removes the taxes from the poor. People would get this money regardless of whether or not they spend it at the retail level. If a family can buy stuff from garage sales which are not taxed, fine. If people earn 10 million a year, fine, they still get the check for 500-600 dollars per month. If you don't understand the Fair Tax you should probably not argue about the Fair Tax. The people who support the Tax will NOT take you seriously if you have not read the book.
Here is what is wrong with it. It would allow our politicians a direct line of wealth redistribution. Once the system gets geared up for issuing checks and direct deposits to citizens, it is only a matter of time until the vote buying starts. If the politicians gain control of the monthly checks going out to our citizens on a national level, BOOM!, we are going to be living in a communist nation.
The Government already controls our schools. They control the speech of our church officials. They cage us in free-speech zones when we disagree with them. They control our right to assemble more than 75 people on federal land without a permit. They control our right to donate to our candidate. They control our medication choices, our gun choices, our currency choices, and many others. When the government gains control of sending us a check constituting substantial portion of our income on a monthly basis the game will be over and the grand American freedom experience will have been sacrificed on the alter of tyranny.
Most of the people who support the Fair Tax are conservatives. They are intelligent and well intentioned. There are some very good things about the Fair Tax that it is difficult to argue with. It would shrink the size of the IRS, tax the underground economy, and put a lot of Washington lobbyists out of work. But, on the whole, it is a terrible terrible mistake to accept this kind of reform. We simply can not allow the government to control the sheeple by sending them checks every month.
The prebate is the worst thing about the Fair tax. It is the biggest welfare program ever conceived of in the history of the world.
