Capital gains in retirement accounts are tax-sheltered (in a Roth IRA, completely tax-exempt). And it's a serious exaggeration to say that "most" Americans are going to use capital-gains for retirement. For the vast majority of Americans, capital gains are a negligible proportion of their total income. Raising capital gains rates and using the proceeds to lower regular income tax rates (to bring the two tax rates closer together) would lower many more people's taxes than the reverse would.

The actual appreciation of their investments would be higher if you eliminated corporate income tax. And you would still get to defer payment until you sell the actual investment.

Properly designed, it all evens out.

The problem is "defer payment until you sell the actual investment." which is when I have no other income coming in. This isn't going to be a rich person's problem, it effects pretty much everyone under 50.

Specific interests being mentioned in a tax policy discussion? Unheard of!

I take your meaning, but I am not looking for a interest group tax deduction. I am really wondering about what all of us need out of a tax system. It is more about when is it ok to tax and when is it just moving money around (SS and Unemployment are two I can think of off the top of my head).

I admit to being in the flat-rate tax camp with exclusions for one time capital gains (selling stock not dividends) and estate tax. I also wish they just gave a large basic deduction ($15K or $20K) and had everyone file as individuals.