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05-04-07, 12:46 PM #1Banned
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Tax Reductions -- Simplified for Dummies
Sometimes politicians, journalists and others exclaim; "It's just a tax cut for the rich!" and it is just accepted to be fact. But what does that really mean? Just in case you are not completely clear on this issue, I hope the following will help. Please read it carefully.
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." Dinner for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free. But what about the other six men; the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now paid $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people, who pay the highest taxes, appear to get the most benefit from a tax reduction. However, the tenth man received the least reduction in percentage. He is still paying the bulk of the taxes and more people are not paying any taxes.
Tax the so-called rich too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating overseas where the atmosphere is somewhat friendlier
05-04-07, 12:57 PM #2
"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."
- Alexis de Tocqueville, Democracy in America
Tell me not, Sweet, I am unkind,
That from the nunnery
Of thy chaste breast and quiet mind
To war and arms I fly. - Lovelace
The opinions expressed by this poster are wholly his own, and should never be construed to even remotely be in representation of his employer, its agencies or assigns. In fact, they probably fail to be in alignment with the opinions of any rational human being.
05-04-07, 10:10 PM #3
Very well explained. I'm a big fan of a flat tax. Let the government have a small cut every time money changes hands. The only exceptions would be within a single household, or within a single corporation. No deductions, no other complications.
A second grader with a calculator could figure out somebody's tax burden. Maybe all the CPAs could start doing the jobs that we "need" illegal aliens for."I'm not a coward,
I've just never been tested
I'd like to think that if I was,
I would pass"
~Mighty Mighty Bosstones~
06-26-07, 02:37 AM #4
Bloody great post.
06-26-07, 09:45 PM #5
Choose The Right. When you're doing whats right, then you have nothing to worry about.
Not a LEO
In memory of Sgt. Howard K. Stevenson 1965 - 2005. Ceres Police Dept.
In memory of Robert N. Panos 1955 - 2008 Ceres Police Dept.
06-26-07, 11:31 PM #6
Sadly, even if you explain it like that to the left, that sounds good to them. See my sig."If everyone is thinking alike, then someone isn't thinking." -Gen. George S. Patton
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