1/10 Subway Stalinist
... which disproportinately affects investors in risky or only marginally profitable businesses. As long as the net return minus the tax is more than zero, you'll have investment.Problem....
When the tax you pay for investing additional money or effort is greater than your
average rate, this is a disincentive to do more because of diminishing returns.
A lot of what you've proposed here really amounts to encouraging or subsidizing risky investment. Take what you said about combining employment and investment income together: that would let people use investment losses to reduce the tax on their employment income. That tips the balance in favour of bad investment decisions more than the current approach, where capital losses only reduce tax on capital gains.