It might work if we did tax the super rich more, but we don't, we often tax them less through capital gains. Taxless corporations would become vehicles for tax avoidance/evasion.

The stock market is not "the economy", "the economy" is not doing too well, but the stock market keeps steaming along while a lot of people struggle and congress does its handwringing over the cost of meager stimulus packages. Maybe some extra tax revenue would be useful.

Dividends can already get special tax treatment, and many corporations are averting taxation entirely. For a lot of situations we're already at your ideal scenario in a round about way, except we're failing to tax the super rich.