OK Dustin....this will be my last post on the topic. I'm tired of this. Here's the deal....let me sum up.
There are more taxes than income tax. So much so that a complete elimination of the Federal Income tax will have no impact on taxes. If you do your research, you'll find that there are many states in the union that do not have an income tax...those states include Texas and Florida. If you do your research, you'll find that because there is no income tax, there is a high rate of property taxes in those locations (folks that retire in Florida don't have an income so there is no point trying to tax their income). Here in Colorado, it is illegal to tax a person at the local level based on their income. Guess what, the City and County of Denver and the City of Aurora passed a "head tax" to get around this so that everyone is taxed a flat rate no matter what their wages are. You may call that fair but as a tax guy, I call that as a way to get around an established system.
Business 101 will tell you that the #1 priority of any company is to maximize shareholder wealth. It would be great if every company had a social agenda and priced the products they sell at reasonable prices because it helps other people out. This is not the case (at least not in our business environment). A company will do anything it can to maximize shareholder wealth - including keeping prices at a high level. In your example of video game players, do you really think the cost of production has gone down and that's why prices have gone down? Do you really think that it's because of a price war between the Wii and the xBox? It's not....take an economics class and learn about a person's marginal propensity to save and marginal propensity to consume. You might also visit on the concept of "cash cows". There's a reason why Croc's shoes were in style and made a ton of money....and why their auditors recently announced there is a concern of the company's future existence. A company is not going to sell a product that it will not make a profit on (unless it's a regulated public utility). Prices are initially high because of the recognition that people feel they "need" that item - not because that's what it costs to make the item. You don't believe me? Take a look at the price of an AR-15 last June and the price of an AR-15 today. Do you really think production costs went up that much in the last 9 months or do you think the price went up because folks are afraid the current administration is going to ban assault weapons? It's capitalism....it's what business is based on in this country.
What the FairTax does is plain and simple. It charges folks a flat rate of tax, based on what they buy, of 30%. You haven't told me yet what your effective tax rate is. Is it more than 30%? The two top tax tiers currently are 33% and 35%. That's based on an ADJUSTED gross income of $164,550 if your single (more if your married).
see page 13 http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
I currently pay 13% in income tax as a rate and I make more than the average household income in the U.S. I have NO desire to pay 17% more in tax - and again, don't give me this crap about how prices are going to magically drop by 22%.
You have an aging population. The majority of the country will be of retirement age very soon. These folks have IRA accounts and Social Security - the majority of them won't have an income tax to pay. If you insist on taxing them at 30% on based on their spending habits, you are going to send them into poverty. Have you received your social security estimate? I have.....my benefit will be $1,900/month when I retire. When I retire I won't have a need to save any money - I will be dead within the next 20 years. What you are doing with a FairTax is basically stripping my income to $1,330 per month. Can you live on that? I can't. Are you ready to support your Dad? When I think about that I think of AARP lobbyists going to town in Washington - you aren't going to win (and for good reason).
Taxes influence behavior. You may not realize this. Do you know why tax rates are different for married couples than for individuals? Do you know why there are tax breaks if you have kids? It's because the U.S. has a vested interest in having a large population of people. People = productivity = power. It's a simple fact of economics - any economics professor can explain this to you. Do you know why the tax on cigarettes and alcohol is so high? Because the country has a vested interest in having a healthy population. They are trying to dissuade people from participating in the habits....rather than make it illegal and create a black market, they tax the heck out of the items and make it inconvenient. A flat 30% tax does not influence behavior - the nation's leaders cannot influence the population in the best interest of the nation.
You appear to have a good interest in taxation. If that's the case, then pursue the career and learn how taxes work. At the minimum, learn how to prepare your own tax return and learn how all the tax forms flow up to the 1040. ....and Canada's VAT tax - is the very same thing as your "fair tax". It's a transaction based tax based on consumption. Call it whatever you want - that's exactly what it is. If you'd do some research on Quebec and their provincial problems with the Federal Government of Canada, you'll see what problems can occur and that it's not a "cure all".
I agree with tax reform...but the FairTax or any "Flat Tax" disguised with a fancy name is not the answer in a country where you have a system of government like we do. You might also want to look into "Home Rule Cities" in your research with relation to Colorado and Louisiana and how they both have cities making independent laws (tax or otherwise). As I said....it's a very bad idea (at least in this country).