Because federal income and payroll taxes are embedded in the price of everything you buy, you are already paying federal taxes on the drugs and other health care services that you buy today – they are just hidden. After passage of the FairTax, prices (even including the FairTax) may not go up at all. Harvard economist Dale Jorgenson estimates that the pre-tax prices of services will decline by 25 percent because of the repeal of the income tax.