Well, that's clear as mud...
If I want to invest my earned income by purchasing stocks or bonds etc. the principle I've used to purchase those investments has already been taxed. I'd have no problem with paying tax on earnings above that principle investment but forcing me to pay taxes on the principle twice, once when I earn it and then again when my investment matures, is double taxation and that's simply not a just system of taxation.
As for tax deferred investments, such as 401k's and Roth IRA's, they'd only be taxed once when the investment matures but you still have a small problem... If you put away, say $1k per month in a 401k, you would have paid a much smaller % of tax on that $12k per year if it wasn't tax deferred, but because it is deferred, and you get it all back at maturity as a lump sum, you're now looking at getting hammered with one of the top brackets. Basically, you could have paid 7-10% if you would have paid the tax up front when you earned it but now you're going to get hammered with 39% Cap gains rate (or whatever % you're suggesting) when your investment matures.
All that aside... 46% of tax filers either pay nothing or get back more than they paid into the system, why don't we start by eliminating all deductions and make sure that every single tax filer actually pays more in taxes than they get back? Those millions of people who got booted from the tax rolls, thanks to the Bush Tax Cuts, bring them and everyone else back onto the tax rolls. Sure they will kick and scream but tough shat, if Obama is going to talk about "shared sacrifice" and complain about people having "skin in the game" it's time that every single tax paying American do their "fair share" of paying income taxes.
