Take a look at this table from the year 2000. It was drawn directly from IRS data. It shows that the top 10% of earners paid 67.3% of all income taxes for that year. To qualify for the top 10%, you needed a family income of $92,114. Is a family who makes $92K a year "rich"? Few would think so.

I certainly have no problem with higher incomes paying more in taxes. I still believe there is no reasonable justification for people paying different tax rates. What is wrong with the idea that everyone pays the same tax rate, perhaps with some basic deductions only for individuals?

As for a capped out income tax rate combined with a luxury sales tax, be careful what you ask for. First of all, there's the issue of what constitutes a luxury. Several years ago, Congress passed a luxury tax on cars costing over a certain amount (somewhere around $30K-40K if memory serves), expensive boats, and perhaps airplanes. The result was that a lot of people who made a living building such products lost their jobs. Given the stupid tendency of Congress to write laws that don't automatically adjust for inflation, what may be defined as a luxury item today might be a common price in 10-20 years. Back in the 1970s, I never imagined paying $20,000 for a car. Today, it's hard to find a good new car for less than 20K. Just look at the insanity of the Alternative Minimum Tax to see what I mean. It was passed decades ago because of news reports that a few hundred rich people were actually taking advantage of the tax code to avoid paying any taxes. Now, it is applying to millions of middle class people because the AMT thresholds don't adjust with inflation.