According to Congressman Woodall, "The Fair Tax does nothing to change the income or the outgo of the current system."
The Fair Tax removes a 12.4% price barrier to participation. It is virtually the most basic economic concept that lower cost drives higher consumption. How can you remove the barrier and not expect more people to participate?
According to BLS, 30% of all labor earnings are allocated to benefits - not including stock options. One has to assume that some part of that is driven by the cost of FICA. To the extent that is true, wages go up and benefits go down. Basically if anyone is avoiding the payroll tax (act shocked), benefits will go up if you remove the tax if only because people no longer will avoid the system.
4% of the working population or about 6 million people work in jobs not covered by Social Security. Currently they don't pay into the system, and don't benefit from the system. Do you expect them to pay into the system but you are going to exclude them from benefits. How can you justify taxing someone for Social Security,and then exclude them from benefits.
I don't know what happens to Social Security because of the Fair Tax. To say that removing all of the costs to participate will have no consequence on participation rates suggests to me that no one in Congress has considered the question.