Changes

Thus, instead of taxing "income", the Fair Tax would tax expenses. This is known as a consumption tax. The estimated rate for the Fair Tax would be 23 percent<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref>, although some critics say it would be closer to 33%.<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref><br />

Thus, instead of taxing "income", the Fair Tax would tax expenses. This is known as a consumption tax -- a method for taxing income on the back end (that is, when the money is spent, rather than when it is earned.) The estimated rate for the Fair Tax would be 23 percent<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref>, although some critics say it would be closer to 33%.<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref><br />