| It means the marginal tax rate for each dollar a person spends in a year increases with the number of dollars they spend. An example of a progressive consumption tax bracket: Dollars spent, marginal tax rate. $0-$5000: 0% $5001-$10000: 10% $10001-$30000: 15% $30001-$80000: 27% $80000-$120000: 35% $150000+: 40%. So if a person spends $15000 a year, they have to pay an additional $1250 in tax. They can spend on food, clothes, luxury boats, and are taxed according to the number of dollars they spend. I don't see how that is regressive in anyway. This way, as long as the spending of two people are the same, a person who makes and spends $20k a year, and a person who makes $80k and spends $20k a year, and works 5x harder, are both taxed at the same rate. This removes the disincentive to work hard while being frugal. You can also pair this with a "Universal Basic Income" later on - e.g. first $10000 of spending in a year is -100% tax, meaning completely subsidised by the government. Welfare could be means-tested on spending rather than income, so folks don't have to worry about losing welfare when they get a job. |