I'm not sure it's true that rich people, on average, consume such a small percentage of their income. Think of all the rich people who end up having to declare

I'm not sure it's true that rich people, on average, consume such a small percentage of their income. Think of all the rich people who end up having to declare bankruptcy--because they've spent so much on consumption that they've used up all their riches. It's true, though, that on average, rich people consume less of their income than poor people, because they save or invest a portion of it instead, simply because they can. That's a good thing. Our current tax system discourages people from saving and investing, and encourages them to consume. Then something bad happens and we wonder why there's nothing saved to tide us over. Exempting basic necessities from sales tax is how you prevent it from putting too much of a burden on poor people; most of what they consume is going to be basic necessities (or at least it should be, if they're rational), so it wouldn't be taxed.