With the power to tax AND the power to devalue the money, it really isn't very hard. Here's just one way the government can steal your wealth:

1, Due to inflation (and maybe zoning laws, for good measure), the house you bought for $100,000 is now worth $300,000.

2. Due to inflation, the price of your stocks have increased in value from $100,000 to $200,000.

3. Pass a law authorizing the government to tax unrealized capital gains (there are already proposals to do just that in Congress).

4. Those 87,000 new IRS agents hand you a bill for $45,000 for unrealized capital gains - even though your wealth hasn't increased. You just have more of a currency that is worth less.

5. Rinse and repeat.

Onward and upward,
airforce