In effect, a consumption tax would put all saving automatically into a tax-advantaged savings account similar to an Individual Retirement Account (IRA).

Question

Quizplus · Accepted Answer

A consumption tax only taxes money when it is spent, not when it is earned or saved, effectively treating all savings as if they were in a tax-advantaged account like an IRA, where taxes are deferred until withdrawal.

In Effect, a Consumption Tax Would Put All Saving Automatically