Of course, one very important reason Americans don't save more than they do is the discriminatory treatment saving receives under our tax code.
C onsider how the tax code treats saving versus consumption.
If a citizen were to spend his income on a trip around the world, he would pay tax on his income one time. If a person were to save and invest her income in a mutual fund, for example, she could expect to pay multiple layers of tax. First, like the globetrotter, she will pay taxes on her income when she earns it. She will pay a second layer of tax on any dividends or capital gains her investment generates. Finally, if she were to die and leave her children an estate, her original income would be taxed a third time.