By Steve Roth
You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that.
We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like?
Lots. Before getting into the idea’s economic virtues and vices, consider the accounting. Whaddaya mean by “saving”? Economists are deeply confused about that word, so it’s worth sorting through a bit