I support the Fair Tax. I don't presume it to be a "cure", but I do think it would be an improvement over the current system. Some of the above criticism is fair.

I'm not sure what is meant by a "low income exemption". Under the Fair Tax, every household would be exempt from taxes on spending up to the poverty level for that household. This may require some minimal reporting, but nothing remotely like what I, for instance, am subjected to now, as someone with a relatively low income, but unable to use the simpler forms because I invest in an IRA and do some buying and selling of stock and have to report (meager) capital gains. This exemption will come in the form of a monthly check, a "prebate", covering the cost of the tax on spending up to the poverty level. One of the criticisms, which is fair, but I think a tolerable trade off, is that people will be getting checks from the government.

I think it is a misuse of language to refer to a tax rebate ("prebate" in the lingo of Fair Tax supporters) as "welfare". The only case where it would constitute welfare in some sense is where a household spends below the poverty level and the household still receives the prebate for spending at poverty level.

For the 43 states that already collect sales tax, the increase in burden on merchants will be minimal. For the most part they will continue to do what they already do, just using different numbers. They will remit the federal tax to the state along with the state sales tax. The state will in turn remit it to the Federal government. Both the merchants and states will be compensated for this work. However, a fair criticism is that this work will be mandated. It will not be voluntary. (Although, if one chooses to be a retail merchant, that choice is certainly voluntary.)

Yes, the Fair Tax is aimed at revenue replacement. It is entirely separate from the issue of spending reduction. It is certainly no libertarian ideal. However, it will do some things people of libertarian bent should like:

Eliminate all Federal tax withholding, including Income, Social Security and Medicare taxes. Eliminate the Capital Gains Tax, Corporate Income Taxes, Inheritance Taxes, the Alternative Minimum Tax. Close down the IRS. Reduce the tax code from thousands and thousands of pages to a few hundred. Eliminate the political use of income taxes to favor certain groups or businesses with special exemptions. Create a very positive investment environment. Allows for a measure of freedom with respect to the amount of tax a consumer will pay as consumers can choose to spend less, or purchase untaxed used items in place of new items whenever feasible.

Yes the Fair Tax is a tax. Yes some people are promoting it with overstated messianic fervor. No it is not a tax reduction, per se, although it will have that effect for many people. No, it does nothing to reduce the size of government. It is certainly no libertarian ideal. But if we were already living under the Fair Tax, and somebody suggested we switch the current complex system of taxation we have now instead, you would think they were insane.