> That would destroy the incentive to save. Why put aside a dollar now, only to have it taxed every year?

Ok? If you choose to spend a dollar instead of saving it, that implies some business will get that dollar. That implies someone will still invest in, build, and run businesses.

> These are things not to mess with lightly.

I agree. It requires a lot of thinking, discussion, deliberation and all that. But the basic math doesn't lie. We will have fewer workers in the future. Machines will make more and more stuff. If you want to continue supporting retirees as promised, then taxing the machines is the only answer.

Otherwise you'll have to break some promises to retirees and pensioners; now that's a real disincentive to save.