A group of House Republicans are pushing to eliminate most federal taxes and replace them with a federal sales tax in a plan that would also abolish the Internal Revenue Service. But tax experts warn the so-called Fair Tax Act is not so fair to working families while giving the wealthiest Americans a break.

The bill, HR25, would eliminate all individual and corporate income taxes, capital gains, payroll taxes and estate taxes while imposing a 23% sales tax on goods and services. However, tax experts point out that the way the tax is calculated, Americans would pay closer to 30% more for everyday purchases.

John Buhl, a researcher at the Tax Policy Center, said this would hit the middle class the hardest. Currently, there are deductions, both standard and itemized deductions, that help offset the income tax, but those would be eliminated.

"Those people will see tax increases and they could be quite sizable," Buhl said of the middle three income quintiles under the plan.

While the bill would likely lead to a hike for middle-income Americans, it does include a monthly "prebate" for families depending on size and income, so lower-income families would likely not feel as big an impact — but the greatest benefits would go to those with the highest incomes.

"The wealthiest of the wealthy would actually see the biggest tax cuts from this switch," Buhl said.

Like middle-income Americans, older Americans would likely also face a greater tax burden if moved to a regressive tax...

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