But corporate US taxes are on profits, so if the US only taxed  inside the country, you can lower your US taxes by engineering your organization such that you can claim US operations pay your business unit that resides  in a different country amounts that are similar to your US profits.<p>So imagine a company that sell 500m of a product in the US and today has costs of $400, with $100m in profit. If they have to pay the business unit in Ireland $90m for their voodoo design expertise, then the company still has 100m in profit, but now only 10m will be taxed in the US.<p>It&#x27;s not as if consumption taxes lack loopholes themselves: In my own case, I spend about 20% of my earnings, with the rest going to taxes and savings (I am aiming for early retirement). So why would I spend my retirement years at a place wth a high consumption tax? The one way around that would be to start taxing money transfers across borders, and we all know that isn&#x27;t happening.