You're ignoring that those people are also paying FICA, Medicare taxes, gas taxes, corporate income taxes whenever they buy goods, etc. Income taxes only make up about 42% of the Federal government's revenues, but people keep pretending that they are the whole story.
- I wrote "income taxes" for this reason.
- Corporate taxes: Yes, they are ultimately "regressive" for poor people, I cannot imagine why folks who claim to represent the poor continue to champion higher corporate tax rates--it simply represents the triumph of demagoguery over facts.
- Let's disaggregate the whole federal revenue picture to see why voters won't put the brakes on spending. For this discussion, it's important to remember that the median AGI on US income tax returns for (2008) was $33k. "Median" = just as many returns (and, for our purposes here, voters) below this number as above it.
-- SS/Medicare payroll taxes (40% of federal revenue): Almost all the money now taken in for these programs is also spent on these programs. Those below the median income receive a very good "return" (expected benefit) for every dollar they pay into SS and Medicare. The overall return is highly progressive. Those above this level receive a progressively worse deal. And yet, the talk today, when it concerns increasing SS payroll taxes, is all about how we can extract still more money from those who earn in the upper quintile. The lower 50% of earners cannot be expected to argue for lower SS or Medicare expenditures in the present environment, not when they pay far less than $1 for every dollar in benefits they receive. So, no homeostatic pressure here--those below the median income will vote for more pie.
-- Individual income taxes: 42% of government revenues. The 50% of people below the median paid almost none (again, on average it was less than 3% of their earnings). These taxes pay for all types of benefits received disproportionately by the 50% of voters below the median income: EITC, the upcoming huge health care subsidies, block grants that pay for services to the poor, food stamps, etc. So, no homeostatic pressure here--those below the median income will vote for still more pie and higher taxes--for others to pay.
-- Corporate taxes (9% of revenues): As above, these pay for disproportionate benefits for those below the median income, but unlike the above, those below the median income pay a large portion of these taxes (indirectly). Again, logic alone cannot explain why the poor, and their advocates, do not appear to be pushing for lower corporate tax rates.
-- Other revenues (excise taxes, customs, etc) 9% of revenues: Effectively below the radar in our national debate.