It seems that modern economists tend to make their study of human action either overly complex or overly simple. Of course, whenever the government enters the income stream, it creates a drag on the economy.
People have to work harder, or make do with less, whichever side of income is taxed.
The major difference between a sales tax and an income tax is the implementation. So, the federal government would much rather rely on wage taxation. Since government is inherently less efficient than the private sector, the more money it takes, the higher the rate of unemployment, even as it attempts to provide more services. But like the frog who was slowly boiled, the people have come to accept higher and higher levels of total taxation. Reform movements come and go with the personalities and personal fortunes of the reformers.