The technical distinction is most important, as income is not the same as wealth, which is what is left after taxes are paid on income. A capgains tax is a tax on wealth, not income. This assertion is at the heart of your opposition. The tax on ordinary income precedes any possibility of a capital gain. A capital gain can only occur through the investment of after-tax ordinary income.
Ordinary income has no risk associated with it.
You work, you get paid. B. Bank interest is not associated with risk. It can be taxed at ordinary rates without causing a decline in economic growth as long as the ordinary rate is not high to begin with. Whenever after-tax income is saved on the promise of a fixed rate of interest, it should not be considered as the equivalent of an investment in equity, which has no guarantee of any return. We want people to sink their money into investments which may not turn out to be economically useful as long as they bear all the risk.