The "common people" outnumber "the rich" by a wide margin. That allows them to elect politicians who'll stick it to "the rich" through taxes to allow for income redistribution to the "common people".

Have you ever wondered how the 16th Amendment (the one that allowed for income taxes) was passed? Before the 16th Amendment, a tax on income was unconstitutional. It isn't easy to pass any constitutional amendment: it must first win a 2/3rds super majority in both houses of Congress and then be ratified by 3/4ths of the states. How would anyone expect to pass an income tax through all of those hurdles?

Easy: it was sold as a tax only on "the rich." According to this source (and I've seen the same numbers in other sources):

When the first income tax was sent out to the people, the Congress chortled confidently that "all good citizen will willingly and cheerfully support and sustain this, the fairest and cheapest of all taxes." That was the cute little monkey part. After all, the first tax ranged from merely 1% on the first $20,000 of taxable income and was only 7% on incomes above $500,000. Who could complain?(Ed. note: In 1994 "dollars" that $20K is now over $250K and the $500K is today over $6 million!)



At first, scarcely anyone did. Little did they know that before the tinkering was done in Washington, this system would be described by many Americans as the most unfair and expensive tax in the history of the nation. Within a few years, it had become the principal source of income for the federal government.

In the beginning, hardly anyone had to file a tax return because the tax did not apply to the vast majority of America's work-a-day citizens. For example, in 1939, 26 years after the Sixteenth Amendment was adopted, only 5% of the population, counting both taxpayers and their dependents, was required to file returns. Today, more than 80% of the population is under the income tax.



How many other times have "soak the rich" schemes turned around to bite just about everyone?

Quite a few, actually. A couple years ago, there was talk about repealing a tax on long distance phone calls. That tax was passed in 1896 to pay for the Spanish-American War. Since only "the rich" could afford to own phones and make long distance calls back in 1896, not too many people complained about it. Over 100 years after the end of the Spanish-American War, we were still paying the tax and it affects virtually everyone to the tune of over $3 billion a year.

The same applies to the Alternative Minimum Tax. It was written in response to a report that about 300 rich people used the provisions of the tax code to avoid paying any income taxes. How dare they actually use the law! The AMT now impacts millions of middle income taxpayers each year because the limits were never indexed to inflation.

The moral to the story is be careful what you ask for. That "soak the rich" scheme that sounds so fair will likely come back to bite you, too.