It should be clear by now, that to encourage increased economic production and innovation, and therefore increase human well-being, we should not take nor tolerate any action which will discourage investment.

Since investment is made on the basis of anticipated return (profits), as the return is lessened, so also is the motivation to invest.

Taxes - the cost of government - have the inevitable and ultimate effect of decreasing the incentive to invest.

Since some form of government is unavoidable in human affairs, it is critical to keep the costs of that government, and thus the taxes required to sustain it, to an absolute minimum.

One form of tax favored by government is a tax imposed at the point of production - an income tax.

This form of tax can be imposed upon literally millions of productive persons at the point where they are producing - in other words, at the point where they are earning money, whether from their investments, or their active employment.

Through a legal mechanism called "withholding", employers are compelled to collect the tax from their employees before paying them the balance of their wages.  In short, employers are pressed into service to act as "tax collectors" for government.  The costs of calculating, collecting, documenting, and submitting the tax is borne by the business.

Most people tend to think of their earnings in terms of their "take home" or "after taxes" income - or that income that is then available to them to pay for things they need and want, such as food, shelter, clothing, vacations, and entertainment. 

As a result of this legal sleight-of-hand, most people do not consciously think about how much of their productive effort (wages earned from work) is being confiscated to pay the costs of government.  Government is thus able to extract an enormous amount of money from millions of people, who don't "miss" the money.