Our Taxes
This is a great example for anyone who wants to argue that the RICH ARE THE ONES WHO BENEFIT FROM OUR TAX SYSTEM!!
Our Tax System
Sometimes politicians, journalists and others exclaim; "It's just a taxcut 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 thefollowing 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 allten comes to $100. If they paid their bill the way we pay our taxes, it would go somethinglike 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. Butwhat about the other six men - the paying customers? How could theydivide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtractedthat from everybody's share, then the fifth man and the sixth man wouldeach end up being paid to eat their meal. So, the restaurant owner suggested that it would be fair to reduce eachman's bill by roughly the same amount, and he proceeded to work out theamounts each should pay. And so:
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. Hepointed 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 backwhen I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't getanything 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 satdown and ate without him. But when it came time to pay the bill, theydiscovered 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 howour tax system works. The people who pay the highest taxes get the mostbenefit from a tax reduction. Tax them too much, attack them for beingwealthy, and they just may not show up anymore. In fact, they mightstart eating overseas where the atmosphere is somewhat friendlier.
(from David R. Kamerschen, Ph.DProfessor of EconomicsUniversity of Georgia)
Our Tax System
Sometimes politicians, journalists and others exclaim; "It's just a taxcut 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 thefollowing 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 allten comes to $100. If they paid their bill the way we pay our taxes, it would go somethinglike 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. Butwhat about the other six men - the paying customers? How could theydivide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtractedthat from everybody's share, then the fifth man and the sixth man wouldeach end up being paid to eat their meal. So, the restaurant owner suggested that it would be fair to reduce eachman's bill by roughly the same amount, and he proceeded to work out theamounts each should pay. And so:
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. Hepointed 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 backwhen I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't getanything 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 satdown and ate without him. But when it came time to pay the bill, theydiscovered 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 howour tax system works. The people who pay the highest taxes get the mostbenefit from a tax reduction. Tax them too much, attack them for beingwealthy, and they just may not show up anymore. In fact, they mightstart eating overseas where the atmosphere is somewhat friendlier.
(from David R. Kamerschen, Ph.DProfessor of EconomicsUniversity of Georgia)
posted by Leon @ 12:25
0 Comments
Mike & I just making it over the top
