Is Kevin Milligan wrong about VATs being compatible with progressive outcomes?

In the course of the VAT/HST debate in British Columbia, professor Kevin Milligan of the UBC Economics department made an important point.

He referred to this table of VAT rates around the world. ("VAT" or value-added tax, of which the HST is the latest example) is the term Europeans use to describe their consumption tax, which is levied on any value that is added to a product--unlike the simple sales tax, it is not levied on the entire value of a good and service at every stage as it passes from original producer to final consumer.) Milligan noted that in France the rate is 19.6%. In Sweden it is 25%. We know that these are two of the most equal countries in the world, with respect to incomes.

So, how is it that these countries have this huge VAT and yet have a very equal income distribution? Milligan suggests that the pre-tax income distribution is less extreme in those countries (e.g. executive pay is much less) and that their income tax systems are more distributive.

"So, it strikes me, looking at that VAT table, that the barrier to a more equal society is not avoiding a large VAT, it is having progressive tax rates and less pre-tax income inequality.
VATs present no barrier to having more equal economic outcomes."

I agree. I first became interested in consumption taxes as an undergraduate student over a quarter of a century ago. (Some would say that was the beginning of my indoctrination.) But the people I was reading--economists Albert Hirschman and Arthur Okun and philosopher John Rawls were three that I remember most clearly--were anything but neoconservatives. They reasoned that the trade-offs between equity and efficiency could be reduced if (for a given level of taxation revenue)the tax did less harm to incentives to invest, work and save. And there was an additional, more practical reason for liking consumption taxes: they were more difficult to evade. Income taxes are festooned with loopholes, which are exploited by corporations and affluent professionals but not by workers who are taxed at source in their payrolls. With consumption taxes, the loopholes are for the poor and the workers: on basic groceries, basic accommodation and so on.

SO, when the NDP returns to power in B.C., it should look to (1) broaden these HST exemptions and rebates, if necessary; and (2) make the income tax more progressive, if that is possible. (In fact, that could be the Left's version of a revenue -neutral tax change--use the latter to offset the former.) But I do not see the need to scrap the HST or to raise everyone's income taxes an enormous amount.