Shelters and loopholes dilute the impact.
Rapp ‘1 [Geoffrey; 2001; JD from Yale Law School, AB in Economics from Harvard University; University of Missouri-Kansas City Law Review, “Monopoly's Hidden Justice: How Lax Antitrust Enforcement May Stimulate Charitable Giving and Overcome the Political Economy Barriers to Redistributive Taxation,” vol. 70]
Third, the political economy of taxation could interfere with this "natural" approach to redistribution. Obviously, taxing the poor to provide for the poor makes no sense. Yet taxing the rich to provide for the poor could be problematic because the rich have the resources and the incentives to fight changes in the tax code, and then to evade enacted modifications through the use of loopholes and shelters. Although the empirical question of whether raising marginal tax rates on the wealthy meaningfully increases revenues remains unanswered, 11 the assumption here is that political leaders have largely made up their minds about the difficulty of taxing the rich to pay for the poor. As a result, even if the rich could be taxed successfully to generate revenues for the sake of redistribution, practically, this may no longer be possible. This situation leaves the Rawlsian legislator with a last option: taxing the middle class. Any Congressman interested in re-election under this anti-tax polity has to know that arguing for increases in middle-class tax rates could amount to virtual political suicide. 12