Dave Ramsey wrote a response to someone asking about the FairTax.  Unfortunately (and frustratingly) Dave got a few of his facts wrong*.  Nevertheless, I have to agree with one person from OH (identified only as "Kicker"), who commented on Dave's article saying:

While many applaud the benefits of the FairTax, very few discuss the drawbacks.

First, because people will receive their whole paycheck, they will have control over more of their own money. This means they will waste a greater percentage of their total income buying things they don't need, or that are not approved of by those who now work for the government and know better.

Second, businesses will have expanded markets overseas due to lower production costs and more competitive products. This means that our trade deficit will decrease, and foreign governments will have less money with which to buy American real estate and businesses. This will be a blow to trans-nationalism, and will result in fewer Americans working for foreign-owned companies, and fewer jobs being moved off-shore.

Third, government corruption will be decreased. Without a thick cover of convoluted IRS regulations, government employees and elected officials will be less able to hide nefarious behaviors. Manipulation of the tax system in return for political contributions or outright bribes is a time-honored tradition, practiced around the world. Instituting the FairTax will strip Congress of the ability to manipulate the tax system in favor of political cronies, reducing Congressional contributions, and, maybe, even resulting in the election of more honest politicians. Don't let it happen!!!

The dangers of allowing people to keep their money, keeping American jobs at home and American business strong, coupled with the horrors associated with honest government, are just too great.

For the sake of our children, who fortunately already owe $22,000 in debt, don't let reactionaries pass the FairTax and end a system we, almost, understand.

Ban the FairTax.

*Note:

Dave's mistakes:

DR: "The basic premise of the Fair Tax is that it’s immoral to tax someone’s income"

No. The premise is that taxing retail sales makes for better incentives, and less opportunity for government meddling than an income tax. It's not a question of moral or immoral - just better / worse, or effective / ineffective.

DR: "People would only pay taxes on items they buy, except for food, basic clothing, and other kinds of necessities."

No, That is what is commonly called a VAT (Value Added Tax) plan - as they have in Europe. The FairTax taxes EVERYTHING sold at retail.  This, combined with the prebate, is what makes the FairTax fair - it treats everyone exactly the same, no matter how much money they make - and yet it is NOT a regressive tax due to the prebate.  Up to the poverty level of spending on retail products and services, all taxes are prebated.  Those who spend above the poverty level will pay the FairTax out of their own pocket for all retail goods and services above that level.

DR: "We’d see a lot of job losses if the Fair Tax system were put in place. Tax preparation services and things like that..."

While it's true that those in the tax preparation industry, as well as lobbyists and tax advisors would lose their jobs, those "losses" would be MORE than made up for by new jobs created in the new tax haven for manufacturers.  And most assuredly, those who are skilled at accounting (such as CPAs) would undoubtedly find MORE than enough work as business boomed.  So, while a few people would lose their current jobs, the net effect would be significant job gain.  (And, honestly... most people are savvy enough to understand that the tax preparation industry is really a seasonal one - working from January through April 15th every year, with only a very few (comparatively) employed throughout the year to handle quarterly taxes for businesses.)