Capitalism depends on savings. How else can people get a share of industry except by investing? Investing is the life blood of capitalism.
Of course, a certain amount of consumer spending is necessary, too, in order for there to be a market.
So, why not a sales tax instead of an income tax? Currently, the government's income is about 17% of the GDP. If we had a tax of, say, 20%, with 3% dedicated to paying down the debt, why couldn't that work?
Of course, everything except savings and investment would have to be taxed, no exemptions for real estate housing, medical care, groceries, utilities, services, or anything else that tends to be exempted from sales taxes.
Taxes would be pretty high, still, though. 20%, on top of the nearly 10% we pay in Calli would put a real damper on large purchases.
