So I've had several more conversations on my tax cut proposal and basically landed on the following amendments.
1. We can get MOST of the same benefits by taxing income rather than wealth.. this helps remove problems like being taxed on the same money every year if you have no income (for instance). It also conveniently requires less regulation and reorganization of the tax code. Leave the same stepped income tax we have now, but simply add that all domestic purchases of goods or services (not money-like things such as stocks and bonds) are tax deductible.
2. Make it so that the deductions can never reduce your effective income below 80,000 dollars, or some similar number. This removes the disincentive to save for the population that needs to save the most. While I"m not sure that's entirely necessary, it cleanly addresses an easy criticism of the plan without mitigating its effectiveness. People making less than 80k a year are still going to be spending a non-trivial proportion of their income meeting their day to day needs and expenses, and it's probably better if people in that situation save for a rainy day, in case they lose their revenue stream.