Does a VAT work?

The regressive nature could be removed by an income based rebate or UBI.

> The regressive nature could be removed by an income based rebate or UBI.

Like Universal Basic Income or Mincome, this sounds great and even conservative intellectuals like the concept (Milton Friendman was a major proponent of mincome).

In practice - the problem is this gets framed as "sending YOUR TAX DOLLARS to LAZY POORS". So we're likely to end up with the regressive consumption tax and no rebates or UBI, whether that's day-1 or a decade or two down the road.

In practice I've also noticed that many EU retailers will attempt to charge VAT even on export goods (which should not be taxed), and I'm sure they're reporting them as exported and just pocketing the extra 20% tax.

You can get your VAT refund at the airport, retailers can't give it to you directly.

I mean internet orders. That's the point of export as far as VAT is concerned.

EU retailers should not be charging VAT on orders they deliver overseas.

VAT is how most countries that aren't the USA handle this problem. But even then, this isn't global taxation that the USA wants to implement uniquely, if something was made and sold outside of the USA, the USA would never have a chance to VAT it.

I honestly can't tell if you're being ironic/sarcastic here. If this is seriously what the US wants to do, no amount of domestic tax reform is going to achieve it. Military conquest would be the only option (at least for unilateral global taxation). Then 'domestic' tax reform afterwards.

I think it would. I'm starting to get that familiar 'realities are diverging' feeling reading some of the comments on this post.

Other than the options you have suggested to deal with the regressive nature of consumption tax (which seem sensible to me), I thought the Republican tax proposal is essentially to: lower tax on returns to capital (by reducing the corporate tax rate) and institute a value-add consumption tax (in the form of a cash-flow tax).

The republican proposal equalizes American taxes with much of the rest of the world with respect to imports and exports. Basically, in most countries, goods coming in (imports) are charged VAT while goods going out (exports) get a VAT rebate. Since the USA doesn't do that ATM, goods going into Mexico get VAT applied to them on the Mexican side but do not get rebated on the American side, while Mexican goods coming in get rebates from Mexico but nothing occurs in the USA beyond normal sales tax.

This is a different thing from taxing global profits, which is uniquely American (well, and Eritrea). VAT is something else.