 The predicted effects of the FairTax are a source of disagreement among economists and other analysts . According to Money magazine , while many economists and tax experts support the idea of a consumption tax , many of them view the FairTax proposal as having serious problems with evasion and revenue neutrality . Some economists argue that a consumption tax ( the FairTax is one such tax ) would have a positive effect on economic growth , incentives for international business to locate in the U.S. , and increased U.S. international competitiveness ( border tax adjustment in global trade ) . The FairTax would be tax @-@ free on mortgage interest ( up to a basic interest rate ) and donations , but some law makers have concerns about losing tax incentives on home ownership and charitable contributions . There is also concern about the effect on the income tax industry and the difficulty of repealing the Sixteenth Amendment ( to prevent Congress from re @-@ introducing an income tax ) . 
