 Based on a study conducted by Dale Jorgenson , proponents state that production cost of domestic goods and services could decrease by approximately 22 % on average after embedded tax costs are removed , leaving the sale nearly the same after taxes . The study concludes that producer prices would drop between 15 % and 26 % ( depending on the type of good / service ) . Jorgenson 's research included all income and payroll taxes in the embedded tax estimation , which assumes employee take @-@ home pay ( net income ) remains unchanged from pre @-@ FairTax levels . Price and wage changes after the FairTax would largely depend on the response of the Federal Reserve monetary authorities . Non @-@ accommodation of the money supply would suggest retail prices and take home pay stay the same — embedded taxes are replaced by the FairTax . Full accommodation would suggest prices and incomes rise by the exclusive rate ( i.e. , 30 % ) — embedded taxes become windfall gains . Partial accommodation would suggest a varying degree in @-@ between . 
