The idea of workers funding the state is that workers own the state, and everything that comes along with it including the ability to write and enact laws as well as the monopoly on violence. Workers may then own education, the healthcare system, the infrastructure, research institutions, resource extraction and various industries. These conditions are prerequisites for a democracy. (Preconditions, not the realization of.)

This is, or has been, normal in most countries including Europe and the United States. However, in the past couple of decades, the worker-owned state has been dismantled and a monopolistic oligarchy has formed, often working closely together with the bureaucracy of the state.

So essentially the model of parliamentary democracy with taxes on labor has failed, as it allowed other entities to grow stronger than the worker-owned institutions.

The fix isn't to tax the rich. It is to disallow power to consolidate into opaque institutions. This isn't something we should regulate, it's something we should quench.