That's why nobody would set it up that way. The government (in this scenario) could afford to send cash money to all households to cover the tax cost of food and minimal living expenses such that the only taxes paid are for expenses beyond that minimum. A large sales tax would actually work out very well and be rid of the complexities of the IRS completely. I'd encourage anyone curious about how this would work (regardless of your initial reaction to the idea) to check out the reading material on http://www.fairtax.org/ .
