They're talking about replacing it with a national sales tax (and even state sales taxes), so that only those who spend will be taxed, thus encouraging saving. And there would be "prebates" for those under the poverty level (or perhaps a higher level, like those currently eligible for the earned income credit) so that their purchases would essentially be tax-free.

Replacing the current income tax would be equal to or less than the current tax structure, but much easier to administer, and much less of a burden on the average American. http://www.fairtax.org/site/PageServer?pagename=about_beyond

The average marginal tax rate in the U.S. is now about 40%. This doesn't necessarily include things like sales taxes, entertainment taxes and other local taxes. It's been this way since about 1993, when this study was published, finding the total tax burden to be from about 30% to over 50%, depending on income: http://www.taxfoundation.org/research/show/705.html

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