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Unformatted text preview: flat tax, a 20 percent rate would cost this family $3,700. Now consider the Smiths, who in retirement consume every dollar of their $1 million in dividend income. Under the flat tax, the Smiths owe no tax at all because capital income is excluded from the tax base. To be sure, their extra income was taxed at least once at the business level before they received it. But the perception would persist that a high income family would pay no tax....
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- Spring '05