Those aren't even purely consumption based. Also, the whole thing is an attempt to remove taxes on interest. The author talks a lot about how terrible it is to "tax savings" which we don't do - we tax interest. The problem is if you remove tax on dividends and interest you will split to world in short order into those who have savings and those that don't.

Typically people opposed to this will point out that everyone spends money, but only people with assets have extra income from their assets. So someone who spends 100 percent of his income is going to be taxed on 100 percent of his income, while someone who has the same income and spends the same amount but happens to have a million dollars collecting rents will pay tax on a substantially lower portion of his "income". To that the response is always that it needs to be a progressive tax or offer a rebate for those poor people. At that point it's just a way to fuck the middle class, keep the poor working paycheck to paycheck, and let the rich increase their fortunes through rents.

These guys need to run simulations to show how a closed system works - you'll quickly see a bifurcation under those circumstances and they know it.

I think this part of the discussion is really interesting. After all, this is about discussing an actual solution to the problem of "extreme luck" (good or bad).

I don't see your point, however. The authors explicitly say it should be a progressive tax and that income tax should be removed. That does not include removing tax on capital gains.

So I understand the idea as taxing consumption after it reaches some minimal threshold, and otherwise only tax income from wealth. I don't see how that would affect the lower ranges of income other than that they suddenly would be relived of all tax burdens, and in particular, of their by far highest tax rate: the VAT. I also don't see how that "fucks the middle class" - for them, these changes should be mostly transparent. That is, for them, VAT and income tax will just be called differently, but the overall rate still should be about the same.

The real problem arises with the rich, naturally, because their VAT will suddenly skyrocket. In other words, as the rich and powerful rule the world, this is yet another proposal that can't happen without some pain...