I don't get it. If it's a consumption tax, how are we keeping track of their savings, investments, and income for purposes of the deduction?
I take it the basic idea is that any savings account gets treated like a 401(k), except with withdrawals permitted in any future year, not just when you're old. So you can deduct any of your money left over in savings at the end of the year, but then when you withdraw it to spend, it gets taxed as income that year even if the labor income was earned in a previous year. In effect your income is taxed in the year you spend it rather than in the year you earn it.
Isn't this rich people just trying to play with marginal rates on each dollar? As if we need more of that. That seems like an obvious revenue inhibitor.
