A consumption tax doesn't need to be regressive. There are already exemptions in state sales taxes for some "necessities" (i.e. food, internet, electricity). If the basket of exemptions is large enough, then the poor would pay basically no sales tax.
That doesn't make it not regressive, it simply makes it easier on the bottom few. A consumption tax by its very nature is regressive, you pay taxes only on what you spend and rich people by definition spend far less than they earn while non rich people spend far more of their earnings. A consumption tax is a huge massive tax cut for the people who need it least, the rich, no thanks.
It's absolutely true, you aren't rich if you spend more than you make, unless of course you're getting pedantic about "earn" but I include wealth and holdings in earnings as well. I didn't mean "earn" in the wage sense, just in the amount of money you make/inherit/whatever regardless of how.
That's not spending, that's investing, you still have the wealth; you can resell those antique Ferraris. Money is not wealth, it's a medium of exchange, assets are wealth and converting money into assets isn't spending, it's wise money management.
If poor people are paying no sales tax and rich people are paying some sales tax, then the tax can be classified as regressive. The more money you make, the more you spend on non-necessities, the higher your tax rate will be.
> The more money you make, the more you spend on non-necessities, the higher your tax rate will be.
Wrong measure; the correct question is on what percentage of your income will you pay taxes and by definition being rich means you're spending far less than you make so your taxes go down, massively. That they go up a tiny little bit when you spend some money on non-necessities is meaningless compared to tax free money you're now allowed to save which being rich means most of your money.
1) If you consume the same amount of resources/services I do, and you happen to make more money than me, how come is it "fair" for you to pay more taxes?
2) What is the point of being rich and not use that wealth? Percentage-wise, a consumption-based tax could take more from the "poor and middle class". In absolute terms, not so much.
3) Incentives to saving - economically debatable for a government, but I'd guess that debt hurts "poor and middle class" more than any tax.
4) Good for the environment. Imagine if China actually had to start paying for things like carbon credits.
> If you consume the same amount of resources/services I do, and you happen to make more money than me, how come is it "fair" for you to pay more taxes?
Because of the marginal utility of money and the burden of taxation. A 10% tax hurts someone living on the margin far more than someone living with excess and thus the burden is not shared fairly. Taxation of income is more fair than taxation of consumption because the burden is shared more equally. Not the "amount", the "burden".
> Percentage-wise, a consumption-based tax could take more from the "poor and middle class".
Which is what matters.
> In absolute terms, not so much.
Irrelevant, see above.
> Incentives to saving - economically debatable for a government
Not their job.
> Good for the environment. Imagine if China actually had to start paying for things like carbon credits.
Not on topic, this doesn't require consumption taxes.
The problem with changing "amount" for "burden" like you do is that we stop talking about something objective and start thinking in subjective terms. And I really don't want governments to be subjective, especially when there is a better measure available and can be used.
Why would we want such an unfair regressive tax that hurts the poor and middle class?