On Nov 16, 2007, at 3:52 PM, Max B. Sawicky wrote:
> The classic flat tax, by the way, IS a VAT
But a classic flat tax is on income, while a VAT is on consumption. Since the rich consume a smaller proportion of their income than the nonrich, a consumption tax is inherently regressive, despite the flatness of the rate.
Of course, in the U.S., any move towards a flat tax wouldn't be offset by redistribution on the spending side. It would just make the fisc reinforce the inequality of market incomes rather than mildly negating it.
Doug