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> that would incentivize sitting on money

No, it would incentivize investing, since if you just leave money sitting under a mattress, it loses buying power over time because of inflation.

> the economy works better when people spend money

The economy works better when people create wealth through cooperation, specialization, and trade. Taxing production reduces the incentive for people to do that.

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Investing doesn't require people to save money; it causes money to be saved

> Investing doesn't require people to save money

It requires people to not consume; any money that is put towards investment is not put towards consumption.

But most things that you invest in are productive too. In general, the better the returns for the investment, the more productive they are (stocks>bonds>banks)

> most things that you invest in are productive too

Sure. But they aren't consumption. The whole point of investing is to forgo consumption now in order to put those resources to use for something else, something that will improve the situation in the future. That's where the returns on the investment come from.

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