Currently, the personal income tax applies, as its name suggests, to all
income. Salaries, wages
and so forth are taxed whether or not they are
being used to buy goods and services or to save. Heavy consumption,
financed largely by debt,
helped fuel
the economic bubble over the past decade, and more sustainable
consumption patterns are probably needed. One way to produce those is to
not tax income but only consumption, which would encourage savings and
discourage spending.
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