So, do the poor *really* not pay taxes?

In a word: No. The actual effective tax rate for each tax quintile is:

Q1: 31.6% (bottom quintile)
Q2: 28.1%
Q3: 28.3%
Q4: 28.9%
Q5: 30.1%

This is from data collected by the right-wing organization The Tax Foundation, without TTF's "fudge factor" where TTF adds in "transfer payments" that have nothing to do with taxes. This is taxes from top to bottom, from Federal to school district, as of 2004. This year's data should be relatively similar.

In short, it doesn't appear that if you are looking at the absolute percentage of taxes paid, that the United States has a progressive tax structure. Yes, Federal taxes are fairly progressive, but the states have moved heavily towards using sales taxes, which fall disproportionately upon the poor, to balance their budgets, and this is the main reason why the Q1 numbers look so bad.

Now, talking about fudge factors... the right wingers *love* to fudge numbers. They take a number, then they say that the number (the amount of someone's income paid as taxes) isn't *really* the number, and instead this *other* number -- which subtracts out money that the poor never even see, that goes to farmers or landlords or doctors -- is the "right" number. Just another reason why you should always double-check any numbers that right-wingers give you -- they love to fudge things, and if you don't double-check, they might manage to slip something by. Their silliness about "the Reagan tax cuts increased revenue!" is typical. Here's the *actual* income tax revenues for the Reagan tax cuts, in constant 1987 dollars (and remember, "tax reform" with a huge tax hike was signed in 1986):

• 1981: $367,692 (millions) (first tax cut passed)
• 1982: $356,366 (gosh, lower tax rates meant less taxes collected! More tax cuts passed)
• 1983: $332,033 (still falling)
• 1984: $328,470 (still falling. Part of tax cuts repealed in Tax Reform of 1984)
• 1985: $354,677 (still less than before the tax cuts)
• 1986: $359,307 (still less than before the tax cuts) (Tax Reform of 1986 passed, effectively raises taxes)
• 1987: $392,557 (gosh, higher taxes meant more revenue!

So how the heck do righties say that revenues rose after the Reagan tax cuts? Simple. The Social Security tax rate rose from 9.3% in 1981, to 14.3% in 1987, and 15.02% in 1988. If you count the Social Security tax *revenue* as revenue, but then claim that the Social Security tax is not a tax so it wasn't really a tax hike, then you've invented the secret Right Wing Fudge Factor that they use in order to say that revenues rose despite a tax cut. But the actual income tax revenues are as I state above -- I've checked them multiple times with multiple upstream sources (OMB, IRS, etc.). In inflation-adjusted dollars, income tax cuts did exactly what you expected -- they reduced the amount of money the government took in -- and income tax hikes did exactly what you expected -- they increased the amount of money the government took in. Alrighty, then!

-- Badtux the Economics Penguin