A better way to tax?

The article discusses the idea of taxes on consumption. It does not penalize productive work and would encourage savings and investment would encourage saving and investment while discouraging spending and borrowing. Some of the most talked about schemes call for taxing cash flow at the household level. In its simplest sense, this would require taxpayers to total the money that came in over the year, subtract the money that went into savings or investment and apply the tax rate to the remainder. The traditional form of consumption tax is the value-added tax. This is essentially a sales tax level at each stage of production. It could be made or less progressive depending on what is taxed and at what level.