Should developed countries replace all their indirect taxes with a progressive annual consumption tax?
Worker movements in the 19th century opposed sales taxes, despite their greater collection efficiency, not because they can be regressive, but because they are not transparent. They conceal what taxpayers pay to the government, and thus they don't prompt them to regular tax oversight.
Then came the European welfare state. Economists concluded that even the most progressive of income taxation could collect only so much money. Collecting money from consumption as well as from labour income, savings, rental income, active business income, dividends, capital gains, and wealth was key. The question was how to collect money from consumption. Unfortunately, governments implemented high value-added taxes. Even the Eastern Bloc wasn't much different in this regard, as they resorted to turnover taxes.
In recent years, business columnists have suggested replacing the income tax with a progressive annual consumption tax. (And I oppose this replacement, of course.)
That said, what if a progressive annual consumption tax were to replace all indirect taxes? Taxpayers would file and pay this direct tax in a similar fashion to their income taxes, filing an annual tax return: