“So what is it? If it’s a flat tax rate with no adjustable rates then I’m for it. But if, as the article proposes, the flat tax would have different rates based on how much we spend, how would that be tracked and implemented so they’d know when to charge the higher rate? That’s the part that’s throwing me. I don’t want the government tracking my spending to know when to charge me a higher rate.”
The short answer is that it is a flat rate, everyone pays the same rate with each purchase. I think where you are getting hung up is the effective tax rate vs tax brackets.
Look at the prebate as just a flat refund of all taxes paid up to the poverty level that everyone is eligible to receive. Everyone pays the same tax at the register and everyone received the same annual refund amount. If your spending is at the poverty level, with the prebate, your effective tax rate is 0% due to all of the taxes having been refunded. If your spending is somewhat above the poverty level, your effective rate (23% paid at the register minus the rebate) is going to be very low, say around 7%. If you spend a lot more, your effective rate will be, say, 18%, etc. You actually have to spend quite a lot annually to get close to the full rate of 23% (inclusive, 29.87% exclusive).
A "prebate" that "everyone is eligible to receive" sounds an awful lot like UBI to me. Is it a flat tax or not?
It's kind of like gay marriage. At first, the small-government person in me supported any adults calling themselves married as long as they don't force the rest of us to call it that. But the Dims didn't stop with that. They've now taken it to supporting pedo and such.
Don't do the same with the good idea of a fair tax. Don't define it in a way that can be implemented only with UBI (calling it "prebate" is lipstick on a pig). Don't make people pay different sales tax rates if they spend more and have the audacity to say there are no tax brackets.
The "flat" in flat tax means everybody pays the same rate ... period. That's what makes it beautiful. Adding varying rates and "prebates" makes it everything but flat and too much like the crap we already have in place.