That's quite a statement to make with no support... and not true, even if your claim is that the money doesn't move after being income (you could tax savings in that case). In fact, income taxes could be completely removed and taxed payroll side - that just would limit the ability to incorporate deductions.
No, income is taxed because it is considered fair to take more from those who have more, in a greater-than-linear manner, for the good of society. People need income, true, but there is a thresholding effect (beyond a certain threshold, you don't really -need- additional spending power to survive). Not taxing everything above that threshold is generally seen as good as it encourages people to work to better their position, and allows spending to be above that minimal subsistence level so that we can have economic growth.
Taxing other things is often seen as less fairly distributed. GP is suggesting that taxation as regulation/policy should be used heavily, presumably beyond the purported cost of the taxed behaviors, to finance as much as possible. There are significant practical problems with this (black markets and the definition of the discouraged behaviors), but they each have their analog in the income tax system (pay under the table, exemption & deductions).
