How are we going to solve this problem?
We will overthrow the social system of production that makes a progressive tax system feasible.
That, in fact, by the word "state" is meant the government machine, or the state insofar as it forms a special organism separated from society through division of labor, is shown by the words "the German Workers' party demands as the economic basis of the state: a single progressive income tax", etc. Taxes are the economic basis of the government machinery and of nothing else. In the state of the future, existing in Switzerland, this demand has been pretty well fulfilled.
Income tax presupposes various sources of income of the various social classes, and hence capitalist society. It is, therefore, nothing remarkable that the Liverpool financial reformers — bourgeois headed by Gladstone's brother — are putting forward the same demand as the program.
Critique of the Gotha Programme-- IV
In addition to the mortgage which capital imposes on it, the small holding is burdened by taxes. Taxes are the life source of the bureaucracy, the army, the priests, and the court – in short, of the entire apparatus of the executive power. Strong government and heavy taxes are identical. By its very nature, small-holding property forms a basis for an all-powerful and numberless bureaucracy. It creates a uniform level of personal and economic relationships over the whole extent of the country. Hence it also permits uniform action from a supreme center on all points of this uniform mass. It destroys the aristocratic intermediate steps between the mass of the people and the power of the state. On all sides, therefore, it calls forth the direct intrusion of this state power and the interposition of its immediate organs. Finally, it produces an unemployed surplus population which can find no place either on the land or in the towns and which perforce reaches out for state offices as a sort of respectable alms, and provokes the creation of additional state positions. By the new markets which he opened with bayonets, and by the plundering of the Continent, Napoleon repaid the compulsory taxes with interest. These taxes were a spur to the industry of the peasant, whereas now they rob his industry of its last resources and complete his defenselessness against pauperism. An enormous bureaucracy, well gallooned and well fed, is the ―Napoleonic idea‖ which is most congenial to the second Bonaparte. How could it be otherwise, considering that alongside the actual classes of society, he is forced to create an artificial caste for which the maintenance of his regime becomes a bread-and-butter question? Hence one of his first financial operations was the raising of officials‘ salaries to their old level and the creation of new sinecures.
https://www.marxists.org/archive/marx/works/download/pdf/18th-Brumaire.pdf