> the poor would be taxed proportionally the highest
No, they would be taxed proportionally the same. You're starting from the assumption that income is what should be taxed. Income comes from productive activity (labor or investments) and is what you want more of, not less.
> and the richest few percent would love this as their proportion of income that goes on consumption is the lowest.
And what is happening with the rest of the money? It's being reinvested, which is something you want in society.
At the end of the day, the money is only ever used/enjoyed personally by rich (and poor alike) when they consume.
> No, they would be taxed proportionally the same.
No, they wouldn't. The poorer you are, the more of your money goes towards consumption of the necessities of life and therefore the higher proportion of your available funds goes to tax under such a system.
> You're starting from the assumption that income is what should be taxed.
No, I'm starting from the definition of progressive taxation and telling you, accurately, that your scheme is a recipe for regressive taxation as it disproportionately affects the worse off.
Even the ludicrous "Fair Tax" proposals made 15-20 years ago made concessions to this, in proposing that the least well off would be refunded all or some of their taxes.
No, they would be taxed proportionally the same. You're starting from the assumption that income is what should be taxed. Income comes from productive activity (labor or investments) and is what you want more of, not less.
> and the richest few percent would love this as their proportion of income that goes on consumption is the lowest.
And what is happening with the rest of the money? It's being reinvested, which is something you want in society.
At the end of the day, the money is only ever used/enjoyed personally by rich (and poor alike) when they consume.