The FairTax replaces income and payroll taxes with a national sales tax, and provides a rebate for incomes that are below the poverty line. However, as FactCheck has pointed out repeatedly, ads on the tax have omitted a key fact: that the levy replaces existing taxes.
"In dozens of TV ads, Democrats or Democratic-leaning groups accused Republicans of favoring a 23 percent national sales tax, as though such a thing would come in addition to existing taxes," FactCheck states. "The attacks (which were also made in fancy mail pieces) amounted to a misrepresentation of the FairTax proposal. The claims failed to mention that the sales tax would replace — not add to — existing federal income and payroll taxes. Democrats also left out any mention of offsetting rebates designed to mitigate the increased cost of essentials like food and medicine — a main feature of the FairTax proposal."
In past elections, FactCheck called out Republicans for misrepresenting the tax, noting that while candidates claimed to support the tax's 23 percent rate, the real rate would have to be much higher to bring in enough revenue to run the federal government.
"We noted that a bipartisan panel of tax experts — put together by President George W. Bush — had rejected the idea and said the tax would have to amount to at least 34 percent (not 23 percent) of the sales price of goods and services to raise enough revenue to replace other federal taxes," FactCheck stated. "But that's no excuse for [Democratic supporters] misrepresenting the proposal, so this year our darts are pointed the other way."