 If businesses provided employees with gross pay ( including income tax withholding and the employee share of payroll taxes ) , Arduin , Laffer & Moore Econometrics estimated production costs could decrease by a minimum of 11 @.@ 55 % ( partial accommodation ) . This reduction would be from the removal of the remaining embedded costs , including corporate taxes , compliance costs , and the employer share of payroll taxes . This decrease would offset a portion of the FairTax amount reflected in retail prices , which proponents suggest as the most likely scenario . Bruce Bartlett states that it is unlikely that nominal wages would be reduced , which he believes would result in a recession , but that the Federal Reserve would likely increase the money supply to accommodate price increases . David Tuerck states " The monetary authorities would have to consider how the degree of accommodation , varying from none to full , would affect the overall economy and how it would affect the well @-@ being of various groups such as retirees . " 
