MAV - you are quite correct that the "rich" aren't taxed much at all, because they have ways of concealing their real income. Too true.
You are also correct that it is authoritarianism that leads to tyranny and genocide. Authoritarianism can be found in either capitalist or socialist societies...or mixtures of the 2....and flourishes under either, given the right conditions.
As for squalor...well, we've got that in any number of places...like Africa, Eastern Europe, Western Europe (in some areas), South America, Central America, Asia, Los Angeles, Washington D.C., many other big North American cities, and certain depressed rural areas in both the USA and Canada...wherever there are many poor people and many unemployed or underemployed people...and no real mechanism to do anything about the situation, except stick on a few wretched bandaids, and up the police presence, and build more jails to incarcerate those who have snapped under the pressure and turned to crime, drugs, or both.
Most of our current societies have made only half-hearted efforts to deal with the deteriorating social situation so far, which is not all that surprising, because they are run by the very rich, who, as you say, don't pay much taxes...and don't really have much motivation to change the status quo. After all, they are doing fine.
The politicians that we are given a choice to vote for are generally handpicked by those same very rich people, often from among their own ranks. It's a self-sustaining system, a closed circle, that has effectively rendered the general public virtually powerless in the political arena. Your American public is aware of this on a gut level, and that is partly why your voter turnout is so low. People know in their hearts that their vote won't change anything anyway, in more than a very superficial sense. It's the same deal in Canada.
It's very sad. Do I have a simple solution? Nope. I wish I did.