I know next to nothing of financial matters. OTOH, a "knowledge of financial matters" is really just Arabic for knowing how to game the tax code.

If you make a good investment, you should be taxed on your profits when you cash in. IMO, that's income, regardless of the circumstances.

Sure, accountants will figure out how to frustrate any system, but the more complex a system is, the easier it is to game it, and the more can be done to get around it.

As for Eri's comment, under your system, if you earn $36000/yr, you would pay 1% of $35K + 31% of $1K = $350 + $310 = $660. I don't think that is unreasonable, at least, not at the (35000,.31) parameters.
The political fights will come at what values those two numbers should adopt.

The basis of all tax systems should be that both the rich and the poor pay the same for a gallon of milk. This is why I normally do not favor sales taxes of any kind.