I. Most poor people do not work and the U.S. is more or less a "meritocracy."
Whether the first part of this is strictly true or not depends on how exactly you define "poor." But I think it's hard to look at all the facts and say it's really true in any meaningful sense.
Most low income families in the U.S., or families making less than 200% of the federal poverty guideline (which is not regionally adjusted), do work (where a "family" is a couple or a single parent with at least one child under 18, and a "working family" is a family where each family member 15 and older either has a combined work effort of 39 weeks or more in the prior 12 months OR all family members age 15 and over each has a combined work effort of 26 to 39 weeks in the prior twelve months and one currently unemployed parent looked for work in the prior 4 weeks). 71%, in fact (9,658,195 out of 13,622,425; this means 29% of all U.S. familes are "low income") See http://www.workingpoorfamilies.org/xls/WPFP_Conditions_Low-Income_Working_Families.xls Table 1.A.1a. The people who did the study obviously have an agenda (http://www.workingpoorfamilies.org/) but they base their data on Census and BLS data. I think that their definitions are reasonable and their figures are legit.
Bear in mind that 200% of the poverty rate was only $38,700 for a family of four in 2005 (the poverty threshold was an unbelievably paltry $19,350 for a family of four - sounds way too low to me). See http://aspe.hhs.gov/poverty/05poverty.shtml. 200% of the poverty threshold is not much at all, but it's too much to qualify for Medicaid in Illinois and most other states. See http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?RecNum=3355&SubjectID=47.
On the other hand, a narrow majority of families that make less than 100% of the federal poverty threshold are not "working families" (2,825,230 out of 5,982,095, or 47% do work). See http://www.workingpoorfamilies.org/xls/WPFP_Conditions_Low-Income_Working_Families.xls. But in 2004, a majority of all individuals living below the poverty line (37 million people, or about 12.5% of the population) were either children (13.5 million) or working adults (7.8 million people). See http://www.nccp.org/publications/pdf/text_672.pdf p. 3 and http://www.bls.gov/cps/cpswp2004.pdf p. 1. And of course all of this is to say nothing of mental illness, crippling drug addiction, other medical disability, the lack of employment opportunities in economically depressed regions, simple faultless unemployability, or a whole host of other really good reasons why a poor person may not be able to work.
As to the second (implicit) part of the claim, I'd like to throw out a few more references to give some broader perspective. The U.S. has the lowest rate of social mobility (as measured by how strongly your parents income determines your own) in the First World. See http://www.suttontrust.com/reports/IntergenerationalMobility.pdf p. 6 Table 2. We have a very poor UN Human Poverty Index (HPI) rating compare to our peers (17th out of 19 among "highly developed" countries). See http://hdr.undp.org/en/media/hdr_20072008_table_4.pdf. We have the worst income and wealth inequality in the First World. See https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html and http://multinationalmonitor.org/mm2003/03may/may03interviewswolff.html. And of course we have the third to lowest tax as a share of GDP percentage of all OECD countries (a close third behind Mexico and South Korea). See http://www.oecd.org/dataoecd/44/41/39494985.pdf p.1. I see these facts as part of a pretty clear story. Others may disagree.
Additional Note: While I'm pointing out things we're not very good at, I might as well round out the set:
1. We have a ridiculously high homicide rate and gun homicide rate.
http://www.guncite.com/gun_control_gcgvinco.html
Note that these figures are from the late '90's when our crime rates were historically low.2. We have the highest infant mortality rate in the First World.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2091rank.html
Note that we have a higher infant mortality rate than Cuba.3. We have the highest per capita incarceration rate in the world (the entire world, that is).
http://www.cnn.com/2008/CRIME/02/28/prison.population.ap/
4. We have the highest per capital spending on health care in the world but the 37th ranked health care system in the world.http://www.who.int/entity/whr/2000/en/annex01_en.pdf
These figures are for 2000, the last time the rankings we're done. I'm sure we wouldn't be doing any better now.Perhaps it is no coincidence that, in a addition to being a very low tax country, we have extremely low private sector unionization rates.
http://www.nber.org/papers/w3342.pdf?new_window=1 p. 43, Table 2.
The figures are somewhat dated but I'm sure things haven't changed very much.
II. The U.S. is at the point on the "Laffer Curve" where lower tax rates will produce higher government revenues.
In a rare moment of clarity, George Bush Sr. called this theory "voodoo economics." Obviously, at some unbelievably extreme tax rate (say 95%), government revenues would go up if you decreased the tax rate. But we are nowhere near this point. Remember that ~$860 billion in Bush tax cuts (that went disproportionately to the very wealthy, I might add)? They have significantly decreased federal government revenues and increased gross national debt. See http://www.washingtonpost.com/wp-dyn/content/article/2006/10/16/AR2006101601121_pf.html; http://en.wikipedia.org/wiki/Image:USDebt.png; and http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm. So, no, tax cuts do not pay for themselves.
