SD, I don't think there needs to be incentives for long term investing.  Long term investing is the smart thing to do without having an incentive to do it!   In determining an income tax system at any governmental level we should start with the proposition that income, is income, is income and all income should be taxed at the same rate.  I also firmly believe that the income tax should be graduated and there should be about 20 levels of graduation.  When the rich are drafted into the military to be infantry, artillery, combat engineer, and armor privates, then they can pay the same tax rate as those individuals earning $11,770 or less per year.  https://aspe.hhs.gov/2015-poverty-guidelines

Bottom line, any debate about taxes and the tax system that doesn't simplify and make the tax system so transparent that an Oregon high school graduate can understand it; is nothing more than more of the same, increasing the local, state, and national debt.