Does any economy actually have a "consumption tax"? Since it's tax time for individuals in the USA, I have some idle curiousity about proposals for changing the tax laws. In particular, I wonder about replacing income tax with a "consumption tax". Is there any country or economy that acutally bases its tax system on a consumption tax? I suppose there are various definitions of "consumption tax". My impression of it is that it's like a game of last-to-pay-loses - like a sales tax only paid by the last consumer of a good (the one that doesn't make other goods from it). I don't know how that definition can be made rigorous. For example, if a person needs a car for his business of delivering newspapers, the car isn't an ingredient of the newspaper, but it is necessary for the service, which is what the person is "manufacturing".