So a family earning, say, $20,000 a year should pay the same, say, 20% sales tax as, say, Ted Turner? And what about somebody who can't even find $20,000/year? Should they pay that same tax when they can barely make rent?

Flat-tax schemes only serve the wealthy. The reason we have an income tax is so that those making a fortune in this country can pull their weight and help preserve this country.

It IS a brilliant plan...you need to read up on this one. Every family would receive a monthly "prebate" check...essentially the necessities of life are not taxed.

Generally, a consumption tax can be regressive if there are no provisions to make it otherwise. I believe Huckabee's Fair Tax plan includes a rebate to people that are earning at or less than the poverty level, which means that all purchases made by people earning at or below the poverty level are not taxed. These provisions do not make it regressive but truly fair and very simplistic for all ... that is the beauty of the Fair Tax. There seems to be a lot of confusion about the Fair Tax in general and I wish some of these people that like to bash it without doing any research on it would check out Fairtax.org for a little insight...

Cricket, Thanks for the clarification on Huckabee's plan -- a prebate to EVERY family IS brilliant. My understanding was that it was only to people earning at or less than the poverty level.

You need to read the actual tax law, not the pre-digested spin. Its actually a big increase in taxes on the middle class. Why? Because it is a tax cut for the wealthy since the wealthy consume less.

Its regressive like any "flat" tax is - namely the impact of the last $1 spent in taxes by the upper quintile earners will be dramatically less than the last $1 by you.

And it is not any simpler. Businesses are exempt from paying sales tax. But because you can't always get around that they get a "conversion" credit.

SEC. 202. BUSINESS USE CONVERSION CREDIT.

`(a) In General- For purposes of section 201, a person's business use conversion credit for any month is the aggregate of the amounts determined under subsection (b) with respect to taxable property and services--

`(1) on which tax was imposed by section 101 (and actually paid), and

`(2) which commenced to be 95 percent or more used during such month for business purposes (within the meaning of section 102(b)).

`(b) Amount of Credit- The amount determined under this paragraph with respect to any taxable property or service is the lesser of--

`(1) the product of--

`(A) the rate imposed by section 101, and

`(B) the quotient that is--

`(i) the fair market value of the property or service when its use is converted, divided by

`(ii) the quantity that is 1 minus the tax rate imposed by section 101, or

`(2) the amount of tax paid with respect to such taxable property or service, including the amount, if any, determined in accordance with section 705 (relating to mixed use property).

If that isn't a tax lawyers wet dream I dunno what is. And keeping the books on that is a nightmare.

Now add into that the fact that this means if you incorporate yourself you end up paying no taxes, and you are essentially left with no tax base whatsoever.

That's just plain DUMB

A rebate does not make it not-regressive. It just makes it less regressive.

Setting aside the fact that the wealthy spend a smaller portion of their income, you have the general case that the marginal impact of the last $1 spent on taxes by someone earning $200k/yr is dramatically less than the last $1 spent by the person earning $40k/yr.

And the fact that the $40k earner feels the bite more means by definition that the tax is regressive.