Good point steelish, however that could be addressed. A fair tax is the only way to completely tax everything. The flat tax completely misses the underground ecomony, but with a fair tax, if a drug dealer, for instance, wants to eat, he pays the tax. Admittidly we would probably need some type of export tariff to get any tax value from exported items, but, if every comercial transaction is taxed, everyone pays for what they buy.

denuseri, corporations don't pay taxes anyway, that is just a myth. they raise the price of their goods and we, the comnsumers pay the tax they are charged. A fair tax is more honest, especially if you don't allow the tax to be hidden in the price of the goods. The income tax withholding was genius on the part of the government, as, even though you see numbers on your pay stub, it is not real to you, as you never actually have the money. In a fair tax, you could buy 40 dollars worth of goods, and be charged 56 dollars, which would make the tax very real. If it is that real, you have a stake in how it is spent, and by limiting your purchases, you could effectively limit a government that spends unwisely.

It should be set so that at an average year, the government breaks even. This would motivate government to save for a rainy day in good years, or have to make cuts in bad years.

Let me add one last thing to this. The theory that everything the government requires, the government should pay for, (vehicle registration, jury duty, etc...). this would remove the hidden taxes they sneak in on you.