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To: In veno, veritas
One flat tax is an income tax on all income at a flat rate. The Hall-Rabushka flat tax is a consumption tax, with different properties. I've seen the two mixed on many threads, although from what I've read it seems that most people are talking about Hall-Rabushka when in support.
The Flat Tax is the Hall-Rabushka Flat Tax. Removing the graduated rates from the current system doesn't make it the Flat Tax or even a "flat tax." It's just an income tax with a single rate. This misunderstanding is propagated by FairTaxers when they claim that our current system started out as a flat tax (the implication is that if we go with the Flat Tax we'll just end up right back where we are). It may have had a single rate (in fact, it didn't), but that doesn't make it a flat tax as is commonly understood in today's tax reform world any more than someone saying a tax is a "fair tax" makes it the FairTax.
68 posted on 02/27/2008 9:21:45 AM PST by Your Nightmare
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To: Your Nightmare
The terms are often confused in the general public. Wikipedia says, “A flat tax (short for flat rate tax) is a tax system with a constant rate,” on the first line, while Hall-Rabushka Flat Tax is shown (very little) latter on. I’m just saying that the FairTaxers aren’t the only ones with this confusion, which is why I’m wanting people to define terms. If I gambled, I’d bet the average Joe wouldn’t know that their is a difference between the two. I’d further more guess that if you said “Flat consumption tax,” most people would think fair-tax over Hall-Rabushka.
69 posted on 02/27/2008 10:11:35 AM PST by In veno, veritas (Please identify my Ad Hominem attacks. I should be debating ideas.)
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To: Your Nightmare
Semantics. The question is at what point the tax is collected. Under the flat tax it would be collected at the point it is earned. Under the FairTax it would be collected at the point it is spent. You can call them both a consumption tax if you want to but that doesn't change the difference.

You are painting with an economist's broad brush. Both are called consumption taxes because what is left over is savings.

73 posted on 02/27/2008 12:28:26 PM PST by groanup (What do income tax preservationists and economic literacy have in common? Nothing)
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