[Final Authority]

Savings rate is not income. If savings only can buy highly taxed products then there is no incentive to save but to spend anyway. If one could save expecting lower taxes when savings are spent, then that would be an incentive.

With respect to savings, or retirement set-asides, what is certainly true that under a consumption tax the tax rate will be higher than if there was an income tax only.

[kjam22]

The incentive to save and not spend is simple... do I want to have my money to pass on to my children, or do I want to give it to the government so that they'll re-build New Orleans?