The FairTax is a single-rate federal retail sales tax collected only once at the final point of purchase of new goods and services for personal consumption.
Used items are not taxed.
Business-to-business purchases for the production of goods and services are not taxed.
The FairTax is not tax-reform, it is tax-replacement.  It replaces federal income taxes including:  personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment and corporate taxes.
The income tax bracket most people fall into currently is 15% and all wage earners pay 7.65% in payroll taxes which is 23% (and does not take into account the 7.65% employer matching, on top of that you have to add in the business taxes and associated compliance costs passed on to consumers in higher prices).
No more hidden taxes.
Americans are able to save more and businesses invest more.
Capital formation (the real source of job creation and innovation) takes place.
Gross domestic product (GDP) increases by an estimated 10.5% in the first year alone.
The FairTax as proposed raises the economy’s capital stock by 42%, its labor supply by 4%, its output by 12% and its real wage rate by 8%.
As U.S. companies and individuals repatriate income generated overseas (on a tax-free basis)  huge amounts of new capital flood into the United States.
With such a huge capital supply real interest rates remain low.  Additionally, other international investors will seek to invest here to avoid taxes on income in their own countries thereby further spurring the growth of our own economy
Because the FairTax is automatically border adjustable the 17% competitive advantage (on average) of foreign producers is eliminated, which immediately boosting U.S. competitiveness overseas.
American companies doing business internationally are able to sell their goods at lower prices but at similar margins and this brings jobs to America.
U.S. companies with investments or plants abroad bring home overseas profits without the penalty of paying income taxes thus resulting in more U.S. capital investment.
Imports and domestic production are on a level playing field.  Exported goods are not subject to the FairTax since they are not consumed in the U.S., but imported goods sold in the U.S. are subject to the FairTax because these products are consumed domestically.
Taken from the FairTax.Org website:
 Please check out the frequently asked questions page for more information