When I read that Uncle Sam taxes them on the first 8% of their tip, so leaving a 10% tip didn't leave much, I had to smile. It is not be right to imply that then they only get 2%. The first 8% gets taxed at their rate, not taken away in whole. So say their tax rate is low since they are so underpaid - maybe 10% - and therefore a 10% tip, after tax, is a little more than 9% to the bottom line. Now really, they should be taxed on the entire tip, just as the rest of us get taxed on our entire income, but I guess many places may not keep records required to pull that off.
So, I guess if you tip less than that, you are really hitting them hard. I am a strong proponent of proper tipping, but I also don't feel like I should necessarily double my tip to make up for someone else who stiffs the server.