Implement a National Value Added Tax

A Value Added Tax (VAT) is similar to a sales tax.  It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution and is ultimately passed on to the consumer.

Many countries (e.g. all of the European Union, China, Japan, South Korea, Canada, etc.) have VATs.  In most cases, some items, such as food, are exempted from the VAT or taxed at a reduced rate to make the tax more progressive.  As an example, Great Britain has a 17.5% VAT which brought in revenue equivalent to 5.9% of their GDP based on the 2008-2009 tax year.  

Forty-five states collect sales taxes that average 5.6%.  Local surtaxes increase the total sales tax rate to 8% or greater for approximately 50% of Americans.  Some have suggested a 8% Federal VAT for the US.  This would result in a median overall consumption tax level of 16%.  Assuming that a VAT would generate revenue with the same efficiency as in Great Britain, an 8% Federal VAT would raise revenue approximately equal to 2.7% of GDP.  With a 8% VAT in place, the Debt still reaches 100% of GDP in 2031.  By 2050 it would be at 213% of GDP and growing.  This analysis ignores the drag on GDP growth that such a tax would create.