Would the Underground Economy Be a Problem under the FairTax ?

I agree with most of what you said concerning the Fair Tax, with the exception of where you said: "Do you think Mr. Cash Money will expose himself to the Gov’t by applying for the prebate?"

Inasmuch as the Government under the Fair Tax has no idea from where people derive their income, nor how much, individuals who earn their money in less than legal occupations would have nothing to be concerned about by receiving the prebate. All that is required for getting the prebate is that you have a SSN, and you are a legal citizen. I didn't even see in the Fair Tax Act any provision where people in jail cannot receive a prebate.

Of course, Mr Cash Money would be unwilling to get a sales tax license and charge his customers the Fair Tax on his sales, but I doubt his customers would turn him in for that.