All taxes have an impact on something. Taxing income disincentivizes circulation of money within community. When A does some work for B, B does some work for C

All taxes have an impact on something. Taxing income disincentivizes circulation of money within community. When A does some work for B, B does some work for C, C does some work for D, and each of them pays a fraction of the income to the govenment, after a few steps the money effectively disappears from the community. The only way to get it back is to do some work for someone outside the community. But maybe the people A, B, C, D are effective at helping each other locally, but not really competitive at providing work outside the community. With no income tax, they could trade with each other. With income tax, their choices are either gray market or poverty. Wealth tax hurts the startups. Income tax hurts the local communities. Land tax hurts the rent seekers. The rent seekers and startups have greater lobbying power than poor communities, and our laws reflect that.