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dissolves instantly [userpic]

Tax Cuts Explained

July 15th, 2002 (09:22 am)

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner. 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 $7; the eighth $12; the ninth $18. The tenth man -- the richest -- would pay $59.

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."

So now dinner for the ten only cost $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 -- the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men 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 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.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59.

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 o! nly got a dollar out of the $20," declared the sixth man. He pointed to the tenth. "But he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true!" shouted the seventh man. "Why should he get $7 back when I got only $2? 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 he 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 were $52 short!

And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too
much, attack them for being wealthy, and they just may not show up at the table anymore.

Unfortunately, TOO MANY COMPLAINERS cannot grasp this straight-forward logic!

Comments

Posted by: Justin (jwendl)
Posted at: July 15th, 2002 09:30 am (UTC)

I am soooOOO glad that someone else besides me realizes this very important fact of our monetary system / tax system.

Posted by: dissolves instantly (sahrie)
Posted at: July 15th, 2002 09:37 am (UTC)
mi sew smrt!

ya... i don't think it's such a bad thing that they are based on percentages of earnings, but when the time comes for tax cuts i think the people paying the most should most definetly be getting the biggest cut.

Posted by: Mobley (mobley)
Posted at: July 15th, 2002 10:04 am (UTC)

right, except when they have tax shelters and fuck the poor out of their 401k's right?
:P

Posted by: dissolves instantly (sahrie)
Posted at: July 15th, 2002 10:08 am (UTC)
considering...

hmm... i think that might be a whole new can of worms you're opening up there... i'm gonna stick with one idea at a time here k?

Posted by: Mobley (mobley)
Posted at: July 15th, 2002 10:23 am (UTC)
Re:

ok. although i'm no expert, i doubt it's that clear cut.

Posted by: Scene and Herd Studios (ex_madrid)
Posted at: July 15th, 2002 10:49 am (UTC)

one of the problems is the current tax shelters applied to corporation that make the most money. They are paying less in taxes, therefore more of the middle ground and individuals are having to foot that difference. You can thank reagan and his "trickle-down economics" for that.

Posted by: Mobley (mobley)
Posted at: July 15th, 2002 10:56 am (UTC)
Re:

right. the us is definitely geared towards making the gap between the rich and poor larger.

Posted by: Your Grandmother makes Crank in her bathtub (sweet_jcs)
Posted at: July 15th, 2002 06:17 pm (UTC)

but don't forget that the rich man owns the property the poor ass man is renting and makes up for his high taxes by charging out the ass for rent or for food, or car loans.. and basically sharecrops the poor man out.. fuck the rich.. it's all about the socialist society dammit!!!

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