Ugh. I think the fair tax is perhaps the worst type of tax there is (consumption tax).
I've been reading and thinking a lot about taxes, and the perceived problems with taxes. Fundamentally, I believe that you should never tax consumption or production - what you should tax instead is "idle wealth" because you want resources to be used, not sitting idle. I therefore believe all taxes should be based on net wealth, but with a slight caveat:
The tax will still be an income tax only, but the tax rate is based on total net worth. This would help reduce the amount to which the "rich get richer and the poor get poorer" because poor people hold little wealth, so they will get to keep much of their income. The wealthy, however, since they are wealthy, would only be able to grow their wealth more and more slowly.
This is actually simpler than the Fair tax; you don't have to worry about taxing transactions or giving some kind of "credit" based on some average (and therefore incorrect) assumed "minimum standard of living" for food and clothing purchases or whatever.
Probably the most difficult aspects of what I've been thinking will be to figure out how to scale the tax rate appropriately to the wealth; it should probably be done somehow based on relative wealth (rather than an absolute number; e.g., perhaps your income tax rate should be the square of the wealth percentile in which you fall. If you're in the 1%-tile for wealth, your income tax rate is 0.01%; if you're in the 99%-tile for wealth, your income tax rate would be 98%). Note that this is not a marginal rate - this is the actual tax rate.
The other trick will be to figure out how to assign property, so people don't simply hide all their wealth in a holding company. Probably have to base it on shares held or something like that... but it's a proposal that is much more likely to help reduce income inequality, avoid punishing people for being productive, and prevent wealth from aggregating in the hands of a few.