Reply #6: Sure, in a nutshell

[BushOut06]

Basically, the Fair Tax seeks to eliminate all income taxes (even for corporations), and replace it with a national sales tax. This sales tax is levied on everything - goods, food, medicine, services, etc. Their proponents claim that the tax would be around 23%. They also claim that since companies will no longer be paying income taxes, that their prices will drop to reflect that. Coincidentally, they claim that about 23% of all retail costs are "embedded taxes", which would disappear. That's an awful lot of assumptions to make, and assumes that businesses are going to want to part with that extra money they would be collecting.

They claim that everyone would get a "prebate" check every month for the amount that they would spend on sales tax up to the poverty limit. How they're intending to accomplish this, I have no idea. Sounds like a logistical nightmare that might make the current IRS pale in comparison.

In addition, many non-biased experts have said that the sales tax would need to be much higher - at least 30%, it not more - to adequately fund the government.

It's a regressive tax, that places a heavier tax burden on the poor. There are plenty of other holes in the Fair Tax, if you want to do a Google search.