We Interrupt Our Regularly Scheduled Rant For A Brilliant Idea

In conversation with lab-mates Mike, Reid, and Shawn, someone (we cannot reconstruct who) proposed a brilliant and counterintuitive solution to the problem of redistribution of wealth.  It requires no wellfare, and is implemented entirely through the application of a tax break.  I believe that, in the biz, this is considered a WIN.  Here's the idea:

Make all domestic purchases tax deductible.
Only tax wealth (as opposed to income).

Bam! Let's break down the consequences of this.
1. We have effectively incentivized spending, use it or lose it (though not more of it than you do already)
2. The wealthy are the most motivated to spend (but it's still good to be wealthy cause you can get more and cooler stuff!)
3. Making the purchases you need to improve your life or expand your business helps you save money on your tax return
4. In the worst case it degenerates to the current situation: say no one spends anything for a year (awful for the economy and insanely unlikely, but hey) then everyone pays taxes in the tax bracket they are in without any spending deductions and the government gets the same amount of tax income it does now
5. In the hilarious case, everyone wants to be minimally taxed so they distribute income equally among all people and everyone pays the tax bracket of the mean amount wealth in the government.  The government makes the least money when it's the needed the least - in the egalitarian utopia the people created in order to evade taxation.

The basic economic intuition behind why this would be good is that spending stimulates the economy.  This is relatively well understood, and the government is constantly doing things like tweaking interest rates in order to incentivize spending and keep businesses rolling.  A common problem in economic models is that while poor people spend just about all their money on account of needing to be alive and that costing money, rich people end up saving most of their money, which essentially removes it from the economy.  Money that sits around doesn't do anything to increase demand for products, provide jobs, or any such goodness.  So more money actually cycling in the economy is definitely good, and this suggestion does that without any (discernible to me thus far) negative consequences.  Please tell me why I am wrong, otherwise I am running for some major political office tomorrow, on the platform of "Everything is tax deductible and incidentally watch your economy become a perfect fountain of efficiency productivity and wealth redistribution".