Only consumption is taxed - and not all of that even ... and not all of your income is spent for consumption since many non-consumption items are not taxed.
You should read the bill - or use the FairTax calculator from the Pennsylvania FairTax group which outlines many of the things not taxed.
Since I was in a 40% tax bracket for most of the time I was able to save anything now I get to pay another 23% when I spend it. That's a swell idea, oh yeah, I'm really ready to do that. Apparently I was a freaking idiot and should have gone on vacations, etc. and not bothered to save a penny since some want to take yet another big honking chuck of it.
And then there's the joke for those of us who hold Muni bonds. Talk about a load of baloney. Sure, you can get an expert to say just about anything, but the experts that have addressed that probably have never had a penny to invest, have worked for the goobermint or what passes for an establishment of "higher" education.
Those are two of the three very, very large holes in the "fair tax" canard.
The third? No limit on spending, no limit on the percentage that the tax can be jacked up to. Without limits the goobermint will continue to screw us, it'll just pick another position.
To me the two keys to Fair Tax that make it worth doing despite all other problems is that EVERYBODY has to pay and there is no tax on investment gains and interest.
However, things you might not initially think of as consumption ARE taxed, for instance, a bank or investment service.