That should eliminate all the income from the VAT and then some, so the firefighters are still dropping your calls.
$ 1000/adultmonth = $ 12 000 / adultyear. -> requires $120 000 of disposable income spent per adult. Very few people spend $120 000 of VATable (A family making $300 000, a good income, doesn't spend anywhere near $120 000)
So you're arguing for an increase of our sales tax. That's different than saying we don't pay sales tax!
Now, I don't disagree that a mechanism that tames American consumption would be good, and is also counter cycle to the economy.
But the question remains unanswered: How about the effect of sales tax on people and families at the margins [0]? 20-25% sales tax is a lot for them. A sales tax rebate check at the end of the year like Canada does? $70 hardly covers the bite of the sales tax!
[0] Including my in-laws, so I'll admit this is a bit personal.
Ya, Canada used to have a VAT like tax, and then got rid of it in the 90s.
My question was honest though. Is there something special (good) about VAT vs. sales tax that I'm missing? Because the OP implied we don't pay sales tax in the US, which is (generally) not true.
We pay sales tax. What's so special about VAT vs. sales tax?
Unless you are arguing for a federal sales tax, which OK sure federal tax is great, except it doesn't pay for local services. Also, now you also have to argue about the regressive nature of sales tax in general.
$ 1000/adultmonth = $ 12 000 / adultyear. -> requires $120 000 of disposable income spent per adult. Very few people spend $120 000 of VATable (A family making $300 000, a good income, doesn't spend anywhere near $120 000)