Why give capital a break?

I'm not sure what to make of our national tax debate (such as it exists) when the venerable market-rag Business Week is now questioning the very foundations of our reward-the-rich tax policies. Hell, right-on-the-money expert Chris Farrell even digs up this quote from a historical millionaire-you-love-to-hate Andrew Mellon in favor of taxing capital rather than labor:

In the first case [labor], the income is uncertain and limited in duration; sickness or death destroys it and old age diminishes it; in the other [capital], the source of income continues; the income may be disposed of during a man's life and it descends to his heirs.

Surely we can afford to make a distinction between the people whose only capital is their mental and physical energy and the people whose income is derived from investments. Such a distinction would mean much to millions of American workers and would be an added inspiration to the man who must provide a competence during his few productive years to care for himself and his family when his earnings capacity is at an end.

Right on, Secretary Mellon, you Ghost of Sane Bloobloods Past, keep on talking and maybe we could shake some brains into the obese Scrooges whose cold wind
motivates our current "tax-policy consensus". And I'll have none of this workers-are-also-investors nonsense, not until these featherweight taxes on capital can help workers breathe easy, with fatter wallets and fewer collection agents breathing down their neck. (Yes, even the U.S. Bureau of Labor Statistics considers bill collectors to be a growth occupation, especially in hospitals and physicians offices, but I digress.)

Special props to Laura D'Andrea Tyson for pointing out very early on (also in Business Week!) that the Bush tax cuts are sapping America's strength. At first I thought, great way to frame the argument Dean Tyson. But now, two years later, I'm thinking her premise is stark and true.