Well, you do raise some good points, all of which are addressed in the plan.  I won't go into too much detail here, but a couple of things you cited jumped out at me.  For example:

There would certainly have to be exceptions for major purchases like homes - can you imagine what a 30% tax would do the housing market?

Only new items would be subject to the tax.  Used or pre-owned items, like automobiles or homes, for example, would be exempt.  Also, prices on new items would be reduced by about 25% due to the elimination of the "hidden taxes" and compliance costs which are now built into the price of most goods and services.

Your crime analogy is flawed.... we would actually have more crime because those drug dealers you mention would diversify into stolen goods to be sold on the black market - with no taxes! 

I didn't say anything about reducing crime.  What you say is true, but the drug dealer or the bootlegger still wants to "live large" and have his big homes, his fancy new cars and his "bling".  He'd still be paying taxes on all that stuff.

What about all of the people who have invested in Roth IRAs? They have already paid the tax on their retirement savings - they would be taxed AGAIN when they draw it out and spend it.  How is that for rewarding those that have planned for their retirement?  There is a similar problem with those who have invested in tax free muni-bonds and the like.

Under the current system, savings on such investments are already taxed a second time when spent because of all the "hidden taxes" and compliance costs cited above.  So what's the difference?

The rich could still escape much of their tax burden by saving more - they are the only group that currently saves anything as it is.  And, if people save more, to cut their tax burden, the economy suffers.

I refer you to my reply to your objection about the "underground economy", supra.  Rich people still like their toys.  What good is being wealthy if you can't flaunt your wealth?  It's human nature.  Besides, like I stated above, things like that would cost less under the FairTax.

How would the government function during economic recessions when unemployment rises and people spend less?  The Fair Tax would be much more volatile and it would make creating a balanced budget even more difficult.

Still no different than under the current system, in which revenue to the federal Treasury declines during recessions.  The diifference is that that the FairTax taxes a broader and more stable base, and thus would actually mitigate the effects of a recession on lower income earners.

 If we tried it, I think we would end up trying to phase it in along side the income tax and we would end up having both.  We would never really be able to escape the income tax completely and we would just end up with two complicated tax systems.

That's true, and the FairTax bill would require the elimination of the current system, although the 16th Amendment would have to be repealed to eliminate the possiblilty of a return to taxation of income.

Regards,
Scott Perry