Yes, I probably am a little bit confused as to what exactly you mean when you talk about investment. Is buying a house an investment? How about a yacht? What about a vintage car? Stock? From a social point of view these are all more or less equivalent, as in they all result in money going out of your pocket into someone else&#x27;s and some asset (which may or may not appreciate in value) being transferred to you. Depending on your point of view they can all be though of as both investment and consumption. This leads me to speculate if what you really mean is that it is <i>spending</i> that should be taxed and <i>taking a profit</i> that should be tax exempt? If not I would very much like to hear how you would define investment in such a way that it can unambiguously be separated from consumption.<p>But regardless, the intention behind your proposal still makes it a horrible idea. I can see that you will not be swayed by the argument that it is socially very unjust and would result a unimaginable inequality. But as I keep trying to tell you, consumption is the motor of capitalism. It is the <i>demand</i> part of supply and demand. Without consumption, there is no production. And production is what creates all the wealth. Everybody would be poorer.<p>Furthermore, while it&#x27;s true the funding new ventures also contribute to wealth creation, and that lack of risk seeking capital would be a problem, it is simply not a problem that exists in our present condition as evidenced by the historically low interest rates. In fact there is an overabundance of capital in today&#x27;s world. What is lacking is sound new ventures to invest in. If we were to further incentivize investment, we would only accelerate the formation of a catastrophic bubble.<p>Your understanding of macroeconomics is simplistic if you believe as you seem to do that more investing is always positive or that consumption is always negative.