Many on the left, meanwhile, respond to the idea in knee-jerk fashion, believing that a consumption tax must somehow be regressive because sales taxes are regressive. They fail to understand that a progressive sales tax can be implemented entirely differently.
Of course, any large change in federal taxation has complex effects, including from its interaction with state and local tax systems. And the US Congress probably has an innate bias in favor of a complex tax system with lots of loopholes and exemptions, giving members leverage over potential donors. But that is all the more reason to jump at the opportunity to clean up the system and help mitigate wealth inequality at the same time.
Kenneth Rogoff, a former chief economist of the IMF, is professor of economics and public policy at Harvard University.