&gt; A &quot;vat-savvy&quot; guy buys the same car through his company, pays £1k, then claims VAT as a business expense.<p>Which is not tax avoidance, it&#x27;s tax fraud. If you allow the rich to commit tax fraud then it doesn&#x27;t really matter what kind of tax code you have.<p>And it&#x27;s a lot easier to catch tax fraud for consumption taxes than income taxes because the thing being taxed is physically in your jurisdiction where you can find it and see how it&#x27;s being used.<p>&gt; It&#x27;s not just that, it&#x27;s that <i>in absolute terms</i> the exact same thing is taxed <i>in exactly the same way</i> for rich and poor alike. That is regressive, like all flat taxes.<p>That&#x27;s the fallacy. It isn&#x27;t.<p>Suppose everyone gets the same $5000 worth of government services and everyone pays a flat 10% tax (of any kind). A rich person pays $10,000 on $100,000 and a poor person pays $2500 on $25,000. The result is progressive because the rich person is down $5000 ($5000 - $10,000) and the poor person is up $2500 ($5000 - $2500). If you double the tax rate and the level of government services then the rich person is down $10,000 and the poor person is up $5000, etc. You can increase or decrease how progressive it is by setting the tax rate but there is no point (above 0% tax) that there is not more money going into the poor person&#x27;s pocket than coming out when everyone is paying a flat tax and everyone is receiving a fixed quantity in government services.<p>&gt; It&#x27;s pretty clear that personal income taxes are not sufficient, but the answer is not removing those to introduce flat consumption taxes which are even worse in real terms; the answer is to increase taxation on capital profits, rent and property, which is where the real wealth lies.<p>Taxes on earned income are worse than consumption taxes for the reasons I&#x27;ve already mentioned. Taxes on investment income are nice in theory but are extraordinarily difficult to collect because you can&#x27;t locate &quot;investment income&quot; on a map the same as you can a car or a refrigerator, so they end up actually being regressive because middle-income people who don&#x27;t own international corporations have to pay them while high-income people who do own international corporations don&#x27;t.<p>The problem with taxes on property and rent is that they increase the cost of housing, which is also regressive. Property taxes make it more difficult to afford a home and forces more people into renting (which also increases rents), while a tax on rent causes more rental properties to be sold to occupants, which is good for middle income people, but that reduces the supply of rental properties (and therefore increases rents) for people who don&#x27;t have the credit to buy a home, which is very bad for lower income people.<p>Consumption taxes are good because they&#x27;re simple and hard to scam. You buy a sweater, you pay the tax, so does everybody else. Then the government gets a percent of everybody&#x27;s expenditures and gives it back out as a fixed amount of services, which is progressive as above. If you want it to be more progressive all you have to do is either raise the tax rate, or spend the tax money on things that disproportionately benefit the poor (like public education).