Let's shift the basis of taxation to government created and defended privileges. If you enjoy special protection and advantages from the state then expect to make an annual, market-value payment for them regardless of how you use the privilege. Prime examples of privilege are license to the broadcast spectrum, mineral rights, pollution rights, land values, and corporate immunity.
Taxes on privileges will in no way harm the overall economy, and are generally in accord with ability to pay (which is in itself a somewhat vague concept). Privileges are out in the open and easy to tax. The economy might actually operate MORE EFFICIENTLY if we charged for privileges because no one would underuse the privilege assets as is common today.
Taxes on privileges would tend to break up the concentration of ownership in broadcast spectrum and land, which would create loads of new opportunity for people of modest means.
Taxes on privileges are not shiftable. Our current mix of taxes mostly fall on productive activities and tends to be shifted to consumers in the form of higher prices or onto workers in the form of lower wages.
A well structured progressive income tax does take more from privileged income, but our current income tax is becoming a wage tax. The income tax also carries a huge compliance burden and is easily corrupted because of the secretive nature of accounting. The value of broadcast licenses, land, and mineral rights are totally in the open and can be publicly verified by occassional public auctions.