A sales tax on investments (rather than taxing simply on capital gains) encourages long term investing and does not provide a tax shelter for those that decide to make risky investments and lose money.
Capital gains currently generate roughly $118 billion annually in tax revenue.
With a 1% sales tax, the NYSE alone should generate roughly $200 Billion per year on a estimated volume of $20 Trillion.
We could still provide tax exemptions for trades that happen inside of retirement accounts such as IRA's, 401(k)'s and 403(b)'s.