I agree that the income tax should be eliminated and either a 'fair' tax or national sales tax should be instituted. Sadly the current Democratic regime wants an income tax and a VAT tax.
I'm a liberal Democrat and I most certainly do not support a VAT tax. VAT is a regressive tax. Furthermore, the U.S. States and cities would still need to charge their local sales taxes, so we're going to start paying something like 29% tax on everything we buy in addition to income taxes? Never happen. If anyone tried to implement this, the Tea Party demonstrations would be like a...well.. a tea party in comparison to the resulting revolt. Even if income taxes were eliminated in favor of the VAT, the psychological impact of paying such a big tax on each purchase would be too difficult for Americans to overcome, even if it did actually work out to lower annual taxes for each.
Every modern President has said they would try to simplify the tax system, but that's never going to happen because it's a thankless job. Every group would still want to maintain "their" deduction, whether it's the dependent deduction, mortgage interest deductions, business expenses, etc. and even though the deductions are all a game to rig the system for those in the know and in the end, the government needs the same money to operate. So even if the system were simplified to the point where everyone paid a (presumably lower) percentage of gross income and there were no deductions, on average, everyone would still pay pretty much the same thing (you'd save some money by being able to downsize the IRS and you'd no longer have to pay a tax accountant, but that's about it). And the accountants' lobby would certainly object. What's the point of expending all that political capital on that? In the end, no one would be happy.
It's the rich who want a VAT tax because they spend less of their income on consumption. They also want to eliminate taxes on capital gains because they "think" that only workers should pay taxes. A VAT tax, if applied to everything, including food, rent, and medical is unfair because lower-income people need to spend a much higher percentage of their income (usually above 90%) on essentials.
And you can't look at how much something costs across countries simply by doing the currency conversion. You have to look at it from the perspective of how many hours the average worker has to put in to afford the product. Furthermore, things cost more in Europe and in the UK because it's more expensive to do business there. Taxes are generally higher, there's more regulation and restrictions, and while management/executive salaries are somewhat lower than the U.S., benefits cost far more. Energy costs are far higher. Europeans laugh at the meager 10 holidays a year that most Americans who work for corporations receive. And some countries, like Germany, actually have restrictions on discounting. In addition to more holidays, my co-workers in Germany generally start with six weeks vacation (and they take it). All this factors into the price of products.
I participate in a forum about Nikon cameras and the complaints are exactly the same - how Nikon products cost more in Europe and the UK as compared with the U.S.
