Yep. :-)
It also means that all of the money that you have already saved after paying Federal income taxes on it will be taxed yet again with a 23% Federal tax once you decide to spend it. :-(
If you now live paycheck to paycheck and haven't saved much, it's a great idea.
If you have already saved serious after-tax money during your lifetime, it's a horrible idea unless the Fair Tax proponents address the double taxation issue instead of sweeping the double taxation issue under the rug by telling you all reasons you should not mind the fact that you were taxed once by the Feds once at 33% when you earned and saved that money in 2005 and will be taxed yet again by the Feds at 23% when you spend that saved money under the Fair Tax in 2009.
It is too funny that they think one of the big selling points is that the plan promotes savings and investement, as opposed to consumption, yet....
those who are savers and investors under the present system are the ones that get hammered the worst by the FairTax.
The FairTax is a complete fraud, and that is obvious by the lying tactics of those who are trying to sell it to a gullible population.
It also means that all of the money that you have already saved after paying Federal income taxes on it will be taxed yet again with a 23% Federal tax once you decide to spend it. ""
A misstatement of fact intended to play to the FUD (Fear, Uncertainty, and Doubt) element. The correct statement is that any funds spent for taxable things would be taxed at the effective FairTax rate which is different for each taxpayer and depends on his own frugality - or lack thereof. The savings themselves (nor the income from them) are not taxed until spent for consumption.
The effective FairTax rate for most taxpayers will be a lot less than their effective income tax rate under the income tax and can be determined by your using the FairTax Rate Calculator.
Note that the oft-quoted 23% rate (or, more frequently the "30%" rate - that doesn't exist - which sounds even higher though it refers to the same dollar amount) will never be the cost to any taxpayer. It is the marginal rate paid at the cash register but reduced to your effective rate by the prebate so that the cost to you is the item cost plus your effective tax rate). It's much like paying income tax at your marginal rate and receiving a refund so that the rate you've actually been taxed is your effective tax rate.