 Americans For Fair Taxation states the FairTax would boost the United States economy and offers a letter signed by eighty economists , including Nobel Laureate Vernon L. Smith , that have endorsed the plan . The Beacon Hill Institute estimated that within five years real GDP would increase 10 @.@ 7 % over the current system , domestic investment by 86 @.@ 3 % , capital stock by 9 @.@ 3 % , employment by 9 @.@ 9 % , real wages by 10 @.@ 2 % , and consumption by 1 @.@ 8 % . Arduin , Laffer & Moore Econometrics projected the economy as measured by GDP would be 2 @.@ 4 % higher in the first year and 11 @.@ 3 % higher by the 10th year than it would otherwise be . Economists Laurence Kotlikoff and Sabine Jokisch reported the incentive to work and save would increase ; by 2030 , the economy 's capital stock would increase by 43 @.@ 7 % over the current system , output by 9 @.@ 4 % , and real wages by 11 @.@ 5 % . Economist John Golob estimates a consumption tax , like the FairTax , would bring long @-@ term interest rates down by 25 – 35 % . An analysis in 2008 by the Baker Institute For Public Policy indicated that the plan would generate significant overall macroeconomic improvement in both the short and long @-@ term , but warned of transitional issues . 
