With the taxation of Social Security, the concept was that half of the Social Security income would remain free of tax, because it represented a return of the worker's contribution to FICA taxes, as the worker had already paid income taxes on that money. It seemed 'fair' to tax the other half that was represented by the employer's contribution to FICA taxes, which were indeed tax-deductable by the employer, and had never had income taxes paid on them. Of course, they changed the law some years later, to make Social Security means-tested in a way.
The same thing happened with unemployment benefits which had not been taxed prior to the Carter Administration. The limits of adjusted gross income were figured to be pretty high in 1978, $25K for a married couple (hey, the spouse could have a good job, right?) and $20K for a single person, on the theory that someone making that kind of money at that time was either in a very high paying job, or they were in strictly seasonal employment that provided very high pay during a season (think crab fishing or construction) that had an off-season where the worker collected unemployment, and that was just part of the career choice that the worker made.
Then, the recession of the early Eighties took hold, and Bob Dole made sure the limits were throttled down to $18K for the married couple and $12K for the single person. Later, the limits disappeared entirely, and other than a brief respite for the first couple thousand dollars of UC contained in the original Obama stimulus package, it's become fully taxable.
It's like the question they asked Willie Sutton about why he robbed banks and his reply was, "Because that's where the money is." I'm sure we'd see taxation of welfare benefits, worker's comp, and food stamps if it would produce any possible return for the government.
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