[gleeaikin]

I don’t know if the flat tax is the same as Linder’s “fair tax” bill which I have read, all 65 pages. With the fair tax a 23% surcharge would be added to all sales of new products. Thus the entrepreneur would have that 23% separate to forward to the government. In addition a monthly “prebate” was to be paid to people to cover the cost of a minimal living amount of that 23% tax. There would definitely need to be some organization to collect the tax and pay the prebate.

[freeandfreezing]

Sen. Cruz's plan includes a 16% gross receipts or VAT tax on business sales. It is computed by subtracting certain expenses, not including salaries from the gross receipts from a business's gross receipts. So for many small businesses it is essentially a 16% tax on the owner's salary and profits.

For example, consider a guy who mows lawns. He owes 16% of his total sales less what he spent on gasoline, oil, and any new mowers or rakes he bought during the year. And then he owes 10% of his personal income from the business. So he pays at a rate of about 26%.

By contrast, a hedge fund manager earning millions of dollars a year pays at a rate of about 10%. So does a teacher working for the government.

I find it hard to see how a 16% penalty on being self employed or running a small business will help our economy.