I'll try to give it a shot....
Right now, income tax is just that - tax calculated and charged based on income. This includes your paycheck, capital gains and investment income, and business receipts, among other things. Now those businesses that get a tax bill based on their sales don't just shovel the money out of their profits; they incorporate that expense into the wholesale cost of producing the product.
Therefore by eliminating that additional 'cost' to manufacture, the item has a lower cost of production leading to a lower wholesale price, leading to a lower retail price. This lower price is then offset by the FT 'sales' tax, resulting in a net zero sum change.
Theoretically, this results in a tax that is applied directly to the country's GNP and collected at the point of sale to the end consumer when dollars are spent. Conversely, what we have now is a taxation system that is disconnected from the GNP and instead taxes dollars as they are earned at a rate determined by how much the government wants to spend over the next year.
So lets take an example I'm familiar with - a small software company. (The same basic business model applies to architects, accountants, surveyors, and many other knowledge worker types of companies.) The salaries of the employees are essentially the only "cost of production", and the other costs, like office rent, electricity, etc. are unlikely to change much based on the tax regime. In fact the rent increases by 23%, since its taxable, and so does the electricity bill.
Since the employees will now be paying a 23% sales tax in order to keep them happy you're going to have to let them keep what you used to deduct from their pay for taxes. Put another way, you can't very well give them a pay cut when the Fair Tax becomes law. So the business only sees a reduction of its share of the previous FICA and Medicare taxes, which are around 7.6% of the salaries.
So how is it that your selling cost is going to go down by 23% when your cost savings are only 7.6%?
More precisely, if you have sales of 2.0 Million and a payroll of 1.7 Million, then you save about $130,000 in payroll taxes, but your customers have to fork over an additional $460,000. So even if you use all of the tax "savings" to push your prices down, so your sales drop from 2.0 Million to 1.87 Million, your customers still end up paying an additional $430,000 in taxes.
Have you n/ever seen imported products?