It's only in investing that later dollars are worth more than earlier dollars-- and then, the purpose of those investments is to provide either more disposable income now or to provide for one's income in the future, when those dollars will exhibit the same diminishing returns of utility.
That's why flat income taxes are typically only supported by conservative and libertarian politicians; even the economists favored by flat-taxers generally shy away from endorsing such proposals, because they know that they are fundamentally unjust and more importantly, economically destructive. Flat tax schemes cannot support even just the weight of the few government programs that hardline conservatives favor, much less the weight of the programs favored by moderate conservatives and centrists.
The problem with the tax structure the way it is constructed now is that it allows the people with the least tax burden-- or even a negative tax burden, which is morally anathema-- is to increase the burden on the people bearing the most of it without increasing the portion of the burden they carry themselves. It creates a massive perverse incentive to create more and more government programs without considering how to pay for them; since normal people don't pay for them, the only way to encourage them to restrain spending is to make irrational and emotionally-laden appeals to notions of justice we all know are logically faulty at best and morally dubious at worst.
It has essentially reduced our political process to two camps of slavering beasts: one camp demanding unlimited bread and circuses for welfare parasites at the expense of productive citizens, and one camp demanding regressive taxation schemes and government cuts for rent-seeking parasites at the expense of productive citizens. The only hope that productive citizens have in this system of political insanity is to attach themselves to one camp or the other regardless of its incompatibility with their own best interests.