Actually the government would not have taken half why do you think it would? I'm saying that investment income should be taxed the same as the payroll tax minus social security and the medicare tax. At most it would have been around 33%. I never have a problem when it comes time to pay my taxes as I figured the more I owed/payed the more I made. As for risk - I have owned a few businesses as well and I never ever even thought of the tax consequences - maybe because capital gains was so low (15%) at the time but the risk has always been worth the benefit. Not only because in most cases profitable to me but also it was precisely because of the tax benefits given to business owners. Heck even from a personal perspective the tax deductions I am able to take some deductions because I have money that poor people can never take advantage of because they don't have money.
As for your flat tax I have never seen a flat tax that generates enough revenue to sustain the government.
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