And that’s just the administrative side of what is, in the big picture, a terrible idea.

From what I could tell, he's not suggesting we track people's expenditures.

For the initial exemption (the first $20K), the government would simply rebate or prebate that amount to every household. Either a payroll tax credit or a check.

For the extra taxes (after $80K), it's basically the same as income tax from an administrative process standpoint. Anyone earning more than $80K is required to file a return showing their income and showing how much they saved/invested/donated. They then pay a supplemental sales tax on whatever the difference is, which is the proxy for their spending.

Which is why we don't do this. By the time you do all the stuff you need to do to compensate for the massive recessive nature of a consumption tax, it undoes a lot of the simplicity compared to the current system. And you make things vastly worse in terms of inequality. Other countries have VAT's because they're okay with a regressive taxing model to finance a very progressive social services program. We would never tolerate that here.

The problem that McCaffrey can't solve is that ultra-high earners just don't spend much of their wealth on consumption. Ever. They 'spend' their money on 'buying' intangible things - power, access to elite networks, influence in their communities and around the globe, prestige, social standing, strategic patronage, dynastic and permanent social standing and independence for their families, and a host of other things that would never be taxed in his system.