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Very good point Joel. I looked in the book FairTax: The Truth Answering The Critics and this is what the authors have to say at p190:

"Yes, you've been saving all your life. And, yes, you've already paid income taxes on that money you put in your savings or investment account. And, yes again, under the FairTax you're going to be taxed when you take that money out of your savings account and spend it.

So what else is new?

Think for a moment. You're going to be taxed anyway! When you take that money out of your savings or investment account and spend it, either you're going to pay the embedded taxes that lurk in every product and service you consume, or you're going to pay the FairTax. Six of one, half-dozen of the other. However- and here's your bonus - under the FairTax you're going to be receiving the prebate. Everything you buy with those savings is going to cost pretty much the same - plus you'll have that prebate check every month. Still sound like a bad deal?"

So that's the explanation offered. Whether it is accurate and satisfactory I can't say. But I wanted to share it with you.
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