[scotty79]

I don't think so. Rich people buy vastly more. Not just food, shelter and entertainment but also real estate, entire companies and financial instruments. They'd end up paying vastly more tax.

[betaby]

> Rich people buy vastly more

Not enough, especially since everything is business expense for them.

[scotty79]

That's the point. With purchase tax business expenses would be taxed similarly to private expenses. At least in the same framework.

[marcosdumay]

If you add financial instruments into the tax (what is a tax on investing, not spending), it will become proportional. What is still not very good.

This blind kind of tax also has horrible impact on the production of goods with high added value.

[scotty79]

> what is a tax on investing, not spending

Money changes hands so it's taxed with a purchase tax as a general rule.

> it will become proportional. What is still not very good.

Progressive tax currently is just a theory. Rich actually pay regressive tax. I'd take proprtional tax over ostensibly progressive tax but in reality regressive tax any day.

[marcosdumay]

> Money changes hands so it's taxed with a purchase tax as a general rule.

That's called a "transaction tax". It has lots of well known issues that are incredibly hard to remedy.

[scotty79]

Can you point me to some reading about its drawbacks?

I know it is used widely for larger transactions of private individuals like buying a car or a house albeit with a small rate of about 2%

Since ownership of houses and cars is carefully tracked it's pretty impossible to dodge.