Matthew Yglesias » Incentives For Saving Versus Giveaways to Rich People

Matthew Yglesias » Incentives For Saving Versus Giveaways to Rich People: "Moving to a consumption tax base would have an additional benefit of making discretionary fiscal policy much more workable. The thing that politicians are most inclined to do in terms of fiscal policy is cut taxes. But tax cuts don’t actually work very well as stimulus. Except they would work well if the only thing being taxed was consumption. In that case, 100 percent of the fiscal impact of temporary tax cuts would take the form of a temporary boost in aggregate demand.