Consumption Tax on the Horizon (Mitch Daniels, 3/31/26, Law & Liberty)
Those socially conscious Europeans, whatever fiscal messes they have created for themselves, have had no qualms about taxing their whole populations. The primary vehicle is sales taxation, in the form of value-added taxes, which accumulate along a product’s value chain and are ultimately paid by the consumer. VATs extract roughly 9 percent to 10 percent of middle-class incomes across the euro zone and can result in middle-income citizens paying for nearly half of all VAT revenue. Every country in the 38-member Organization for Economic Co-operation and Development except the United States has one.
When the promises of Social Security and Medicare can no longer be kept, millions of Americans will have to be reintroduced to the reality that the lunch is never free.
That’s a major reason the US, frequent misrepresentations to the contrary, has the most progressive tax system among the most developed countries. Here, the top 10 percent pay about 70 percent of US income taxes, and more than half the total US taxes even when payroll taxes are included. The dreaded 1 percent pick up more than a quarter of the entire federal tab.
The tax-to-income ratio is the highest anywhere, and the reason that glib calls to simply tax the rich more can’t come close to solving the country’s biggest domestic (and, increasingly, a national security) problem.
Make it transparent and adjust it to cover expenditures.