Technically you could implement a progressive consumption tax, which basically is an income tax with a deduction for savings and loan repayments (income + loaned money in said year - savings - loan repayments basically is consumption). Then you could apply a two rate structure. But a progressive consumption tax would be quite hard to implement as nobody has ever done it before AFAIK, and we'd have to track all our financial transactions.
European countries don't really have a sales tax btw, they have a VAT which different (though in the end it also taxes consumption). A VAT is a lot harder to avoid than a sales tax.
You do know you can't do FTA's with individual EU countries like France or Ireland right? It's either the whole EU or nothing.
The basic income doesn't look like a good idea with the sudden phaseout. It probably would be better to settle for something lower than doesn't phaseout or phases out more slowly.
VAT & Sales are kind of similar. Maybe we should have this discussion later Progressive income taxes have been implemented in terms of different goods being taxed at different rates. Like say Luxury Cars at rate X, soaps & all other items at rate Y. Farm & food products have been taxed at 0% at multiple countries.
But AFAIK, it has nothing to do with the income level. You are talking about say income tax credits for consumption which people will get? But do you keep track of everything, all transactions, show proof & get a rebate? Who verifies this? How many people do you need to monitor this? There is also a gigantic scope for loopholes, corruption & individual discretion. What about those who are not paying any income taxes or children & their consumption? Tax payers will be sometimes at the mercy of accountants & lawyers.
There will be mass fraud in items sold. People will sell & get return illegally maybe to take advantage of the loopholes & what not. This is like opening a hornet's nest & is a crazy idea which rightfully hasn't been done.
Are you talking about the progressive consumption tax? People basically would report their income and deduct their net savings. What's left is consumption. So if you earn 75k and your net savings are 10k (I'm dropping some very random numbers) your taxable income is 65k, but there could be a 0% rate for example. I think this is the only possible consumption tax where you can exempt poor people. But like I said, nobody has ever tried this before, and keeping track of savings/stock market investments will probably be confusing (but then again, America's current tax code also is confusing...).
That wouldn't be really "progressive" though, would it?
I mean, yes it would in so far as the more you spend the more you are taxed - but it would still be quite regressive when related to income, as people on higher incomes save a much higher proportion of their income, meaning that a lower proportion of their income would be liable to the consumption tax.
In any case, I think lots of countries have somewhat similar mechanisms already existing in the income tax code - in deductions for mortgage interest, or pensions or whatever.
