I am not understanding this statement the business is not giving you a 25% take home pay raise they just are not taking out taxes you still make the same amount of pay hourly.
The key word is "take-home". Let me try to explain. If they don't take out the taxes your gross pay is the same, but the take-home pay is higher by the amount of the taxes. The business has two choices (actually a range of choices between these two extremes):
A. they can keep paying you $8 per hour and now give you the whole $8 (instead of giving you $6.50 and the govt approx $1.50 as before). In this case the business hasn't saved anything on your income and payroll taxes, so they will be able to only reduce prices by at most 10% (the money they save on your half of FICA, plus a few percent for other things beyond the scope of this post). So, the prices you pay at retail will not go down, and when they tack on the 30% FairTax you will pay about 17% more for everything you buy on average.
OR
B. they can reduce your gross pay to the $6.50 you were "taking-home" before. In this case the business HAS saved on your income and payroll taxes, so they will be able to reduce prices by perhaps 23%. So, the prices you pay at retail will go down about 23% on average, and when they tack on the 30% FairTax you will pay about the same as now for everything you buy on average.
See the example in the letter here for more clarification: