If we were to have just a consumption tax, what level would you set it at?

Question

Let's say we got rid of income tax and instead just used a sales tax (for goods and services procured), what nominal percentage mark would you make this tax: 10%, 20%, or a Swedish like 50%. What would work?

Answer 1

To raise the same revenue as the current graduated income tax, a national sales tax would have to be at LEAST 30%.  That would decimate the poor and middle class and largely crash the US economy.

Go here to see just some of my objections with the so-called "Fair Tax" an expensive 30% national sales tax:  http://answers.yahoo.com/question/index;...

BTW, the Swedish VAT is 25%, not 50%.  Total taxes in Sweden are very high, approaching 50% of all income for most Swedes, but the VAT rate is much less than 50%.

Answer 2

It is not, if it would work.  The question is: would the people accept it. In oil and must products, the consumption tax is the price of the product, the higher the price, the higher the tax.  Also, the more it is wanted the more tax is collected.  It is called Sales tax.

Answer 3

If you were to add all sorts of taxes, such as income, consumption, inheritance, property  and so on I guess the total would be around 40 per cent.  You could discount that a bit since you could get rid of a lot of tax collection agencies in government such (IRS)   There are 3 major problems with funding things strictly by a consumption tax.  Different government bodies would have huge increase in costs.(towns, cities and states)  The cost of living for poor would sky-rocket.  Foreign entities could make huge profits and pay no tax.