Why do tax brackets work this way why is it that a Rich/Wealthy person the first few 000 dollars may be taxed?

Tax brackets are based on income not assets. This means that even though someone may have a lot of money, if they aren't making any income they won't be taxed. Hence, if they're making x amount of dollars this year and it isn't in the 20% bracket, they won't be charged that tax rate. If the rich were automatically charged the highest bracket, they would move their businesses to places like Norway where the tax brackets don't exist or are relatively lower.