What he describes is the opposite of a consumption tax. But he's making all expenses deductible.
It's a tax on savings. What you spend will be pre-tax, what you save will be after-tax. A tax on wealth accumulation.
But that's the way it is now, too. Pay your house off and you can no longer deduct mortgage interest.
Simply, houses are bought with after-tax money. But the interest is pretax. Any principal payment is after-tax. It's been that way forever. What might change here is that your principal payment (as well as the interest) might be pretax.