Taxing things increases their cost. Income & payroll taxes increase labor costs, discouraging hiring and increasing unemployment. Capital gains & corporate profit taxes discourage investment and job creation.
Why do we tax good things?
Instead of taxing good things, we should tax things that are bad for our economy, our health, our security, or our environment, such as pollution, oil imports, CO2, nonrenewable resource use, tobacco, alcohol, caffeine, etc.
If this makes the overall tax burden regressive, we can set up a rebate system to help people with lower incomes.
By taxing bad things, not good things, we can lower unemployment, increase growth, protect our environment, improve our health, strengthen government finances, and lead the world in a smarter way of funding government.