European countries have a VAT that hovers between 20% and 25%

[DFW]

1. In Germany, we're still at 19%

Probably not for long.

However, I was talking to a German government official about their MWSt (VAT), and he was complaining that most or all of it has to be turned over to Brussels (the EU commission), so that money the German government has to spend must be taken from other taxes. They have enough of them! Aside from the usual income tax, there's property tax, Auto tax, "business tax (you have to pay a tax on what a business is expected to have in turnover)," "Körperschaftsteuer (I don't even know what that one is)," Mineral oil tax, and they even slap VAT on the mineral oil tax! To tax a tax, now THAT'S creative, but they do that here in Germany. A friend of mine is a judge on their tax court, and he said yes, it's probably unconstitutional, but who wants to spend a million euros and five years challenging it before the German Supreme Court?

There are still people who fall though the cracks here in Germany, and have no medical insurance at all. My wife recently retired as a social worker here, and worked with plenty of these people. Many of them were illiterate (I had no idea there were still any illiterate people in Germany, but there are, and more than a few).

In the States, you have a system where each State can (and usually does) levy its own income tax and sales tax. In Germany, for example, the "Bundesländer (States)" don't do that, so the VAT takes its place. I don't know how much luck you'd have convincing the individual States of the USA to either give up their individual sources of revenue, or, worse, accept a national VAT on top of their local taxes. Probably no Senator or Representative voting in favor of either solution could ever get past a primary. Of course, in our case, any VAT would not go to some higher authority like the EU, but go right to the Federal Government. However, if it would be anything like Europe, we would quickly find that a VAT is like government heroin: it's very addicting, and ever higher doses are needed to maintain the high.

Here in Germany, they enacted a 5.5% "Solidaritätszuschalg (solidarity surcharge)" to everyone's income taxes and to two other taxes--that way, the money stays in Germany--for as long as it took to rebuild what was East Germany. It was thought that this would take 15 to 20 years. Well, here we are 25 years later, and the German Federal government finds that it likes the extra revenue coming in even though it no longer needs it to rebuild East Germany, so now it's as good as permanent. Anyone making €100,000 a year finds themselves in around a de facto 50% tax bracket, and that's just the income tax before any other stuff.

There is also the issue that a VAT disproportionately hits low income people the hardest, as they are the ones who can least afford to pay an extra 20% for food, clothing and housing.