The most common discussion during a crisis is how to stimulate the economy in order to pass the recession or crisis. Even if economic theory considers a crisis as a necessary evil in order to readjust certain parts of the economy and to enable a fresh start, most of the people dislike these periods and politicians do their best to restore confidence.

However, most of the political action targets businesses. Thanks to subsidies governments ask companies to not lay-off part of their workforce and support those companies in international trades. Temporary tax cuts or cash-injections are part of that "treatment". The goal is to encourage companies to invest further.

But do these measures tackle the right problem? Where is the real problem during a slump? It is not quite the businesses that are the trouble makers here but consumers are. They lose their confidence and spend less. Consumption decreases due to their lack of confidence. Due to this, companies sell fewer goods and services. Selling fewer goods means that they need to cut their costs in order to stay profitable. This means that they will decrease the production volume (fewer orders to suppliers, lower energy consumption, need of fewer workers to produce goods...) and hold back any investment plans. This postponement hits some more suppliers (for instance construction companies or machinery suppliers).

Helping the companies is certainly a good thing to do and makes sense politically speaking because it is always good to know that the industry is happy with the current government. This will potentially safe jobs in the future and make re-election of the government more likely.

But still, it doesn't tackle the issue of consumer spending. How can a government influence consumer spending? You might think of taxes and it is surely the easiest way to influence the amount of money the taxpayer has in his or her pocket. Today, income tax is based on our income (seems logic). By simply lowering the income tax, we would add some incentives to spend more money. But this is not enough.

Let's consider a completely new approach to income tax. Let us call it the savings tax. Instead of taking the tax from the disposable income, the government would base the tax on the income that has not been spent. That means, if a household has spent all of their income, they would not pay (saving or income) taxes. If they decide not to spend all of their money, the tax would be based on the amount that has not been spent. Does that mean that people have no longer the right to put money aside? No, of course not, they can put as much money aside as they wish, but they have to pay taxes on it.

A few things should be exempt from the savings tax though. Putting money aside for the retirement is a good thing and should be supported. Thus a special account will be created where each person can put as much money on as they wish. This money will not be taxed but can only be used for a special (and authorized) purpose, such as retirement. Certain kind of spending can also be supported. If a household spends a certain amount per month or year on education or culture, they have a lower tax on their savings. This encourages people to consider their spending and use more for child education.

The system does therefore not penalize savings that have been made for a legitimate purpose and encourages people to spend all their money. There are few incentives to save. The state would recover from the loss of the income tax revenue by collecting more money from corporate taxes (thanks to higher EBITs) and VAT.