1) is it feasible to keep your emergency money in VTSAX and withdrawal as needed rather than keeping it in a savings account? and
Feasible but not safe. The point of an emergency fund is to respond to unexpected "emergencies" that arise at unexpected times. It is more likely that you'll need it during economic downturns (maybe your company had layoffs). If you need it when the stock market is down, you'll end up having to withdraw at a bad time in the market and you'll probably have to sell for less than you put in.
2) if I withdrawal some, how would it be taxed assuming I'm continually adding to it (automatic deposit every two weeks)
The default for "which" stocks you sell (either for index funds or individual companies) is a First-In-First-Out policy (although you can also specify exact lots if you want to). So if you're selling part of your fund, it'll start with the oldest shares. The two factors that affect taxes are:
1) How much you bought that particular share for (your "cost basis"). The difference between purchase and sale price is your "capital gains" or "capital losses". They are "unrealized" gains/losses before you sell and it's just paper value depending on the current market rate, "realized" after and you have hard cash in your account.
2) How long you've owned that particular share. More than a year is "long-term capital gains/losses", less than a year is "short-term capital gains/losses".
So every sale will be different, but a single sale could possibly contain all four categories of shares (long-term gains / losses, short-term gains / losses). Each share is accounted for individually. Vanguard (or whoever) will give you a report at the end of the year that tells you what is what.
