In practice (never implemented in Europe, though):

http://www.cardin.senate.gov/newsroo...-to-tax-reform

Designed to be at least as progressive as today’s tax system, low- and middle-income families would be protected from unfair consumption taxation through a rebate, and important benefits would be retained in a much simpler income tax code. A revenue circuit breaker, tied to Gross Domestic Product (GDP), is built into the Cardin system to set reasonable limits on the amount of income generated by the new progressive consumption tax.
The PCTA’s income tax exemptions, called “family allowances,” are set at $100,000 for joint filers, $50,000 for single filers, and $75,000 for head of household filers. The family allowances are indexed for inflation.
Four important tax benefits remain: (1) the charitable contribution deduction; (2) the state and local tax deduction; (3) health and retirement benefits; (4) the mortgage interest deduction.
In theory:

http://www.slate.com/articles/busine...equality_.html

Families would report their taxable income to the IRS (ideally under a tax code that greatly simplifies the calculation of taxable income), and also their annual savings, as many now do for IRAs and other tax-exempt retirement accounts. The difference between those two numbers—income minus savings—is the family’s annual consumption expenditure.
Rates would start low and would then rise much more steeply than those under the current income tax [...] In contrast, a higher top marginal rate on consumption would actually encourage savings and investment. A top marginal consumption tax rate of 100 percent, for example, would simply mean that if a wealthy family spent an extra dollar, it would also owe an additional dollar of tax.
Consider, for example, how the tax would affect a wealthy family that had been planning a $2 million addition to its mansion. If it faced a marginal consumption tax rate of 100 percent, that addition would now cost $4 million—$2 million for the job itself, and another $2 million for the tax on it. Even the wealthy respond to price incentives. (That’s why they live in smaller houses in New York than in Seattle.) So the tax would be a powerful incentive for this family to scale back its plans.

[...]

The wealthy family that builds a bigger mansion or stages a more lavish wedding celebration almost surely had no intention of harming others. But its actions nonetheless harm others, by shifting the frames of reference that shape what they must spend in those domains. The progressive consumption tax creates an incentive to take those external costs into account.
The tax would have similar effects in other luxury domains. The amounts spent on multimillion-dollar coming-of-age parties would grow less quickly, as would the amounts spent on weddings, yachts, jewelry, and other items.
Although it would reduce inequality in consumption spending, it would likely have the opposite effect on wealth inequality, since the rich could better take advantage of the savings exemption. Because the wealthy would die with larger estates than before, it would be important to maintain a strong estate tax as part of the system.
Marx:

https://www.marxists.org/archive/mar...structions.htm

Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.