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post #1 of 35 (permalink) Old 11-10-2004, 02:57 PM Thread Starter
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Taxes... simplified explanation.

Tax Cuts - A Simple Lesson in Economics
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, proportional to current tax demographics, 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."

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 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 percentage amount, so 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 $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, but he got $10." declared the sixth man, now pointing to the tenth man.

"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 $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 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 a really shocking thing. 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 do 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. There are lots of good restaurants in Europe and the Caribbean.

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post #2 of 35 (permalink) Old 11-10-2004, 07:39 PM
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RE: Taxes... simplified explanation.

[:D][:)]

That is so true.

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post #3 of 35 (permalink) Old 11-10-2004, 08:32 PM
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RE: Taxes... simplified explanation.

Well the tenth man probably has been writing it off as a business expense this whole time anyway....
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post #4 of 35 (permalink) Old 11-10-2004, 11:56 PM
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RE: Taxes... simplified explanation.

Quote:
jamminjames - 11/10/2004 4:57 PM

Tax Cuts - A Simple Lesson in Economics
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, proportional to current tax demographics, 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."

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 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 percentage amount, so 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 $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, but he got $10." declared the sixth man, now pointing to the tenth man.

"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 $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 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 a really shocking thing. 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 do 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. There are lots of good restaurants in Europe and the Caribbean.
JamminJames,

I don't know you bro.....But I love you. [:D]

Mike


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post #5 of 35 (permalink) Old 11-10-2004, 11:57 PM
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RE: Taxes... simplified explanation.

The tax auditor's motto:

"We're the IRS.
We've got what it takes to take what you've got!"

[:(!]

Mike

Yes, I'm STILL an insensitive Libertarian jerk.

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post #6 of 35 (permalink) Old 11-11-2004, 03:59 AM Thread Starter
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RE: Taxes... simplified explanation.

Quote:
mikemover-the sequel - 11/10/2004 12:57 AM

The tax auditor's motto:

"We're the IRS.
We've got what it takes to take what you've got!"

[:(!]

Mike
And I've heard the IRS is basically illegal.

I wish I knew where to get the information on how to not pay income tax legally. Supposedly it can be done with a lot of paperwork...

Hmmmmmm.

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post #7 of 35 (permalink) Old 11-11-2004, 08:59 AM
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RE: Taxes... simplified explanation.

Quote:
jamminjames - 11/11/2004 5:59 AM

And I've heard the IRS is basically illegal.

I wish I knew where to get the information on how to not pay income tax legally. Supposedly it can be done with a lot of paperwork...

Hmmmmmm.
It can be done.

An acquaintance of mine has become a "soveriegn citizen", and has no social security number, no ID, etc....As far as the government is concerned, he basically doesn't exist.

He doesn't pay any taxes, isn't eligible for social security, etc.....but frankly, I don't see how it's worth the HELL that he is put through just to function on a daily basis.

I'd much rather try to change the system, rather than having a miserable life trying to live outside of it.

Mike

Yes, I'm STILL an insensitive Libertarian jerk.

1979 300SD
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1982 300D

"......I told you so......"

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post #8 of 35 (permalink) Old 11-11-2004, 11:09 AM
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RE: Taxes... simplified explanation.

If you like the idea of equal taxes across the board then you should take a close look at all the 3rd and 2nd world countries on this planet. Look what benefits it brings to them. Is this the type of world you want to live in? If you had been born in one of these countries then you sure wouldn't have a chance to live the type of life/opportunities you have now. That is reserved for the wealthy 1%.

PS You are not rich enough to think this way.

PSII You are being manipulated.
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post #9 of 35 (permalink) Old 11-11-2004, 12:52 PM
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RE: Taxes... simplified explanation.

Quote:
Shane - 11/11/2004 12:09 PM

If you like the idea of equal taxes across the board then you should take a close look at all the 3rd and 2nd world countries on this planet. Look what benefits it brings to them. Is this the type of world you want to live in? If you had been born in one of these countries then you sure wouldn't have a chance to live the type of life/opportunities you have now. That is reserved for the wealthy 1%.

PS You are not rich enough to think this way.

PSII You are being manipulated.
You got to be over $58,000/yr to be in the top 1% worldwide. Am I rich enough to think this way? LOL!

You make people feel bad Shane. Free thought has nothing to do with income.

All hail the Sixteen Men of Tain!
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post #10 of 35 (permalink) Old 11-11-2004, 10:37 PM Thread Starter
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RE: Taxes... simplified explanation.

Quote:
Shane - 11/11/2004 12:09 PM

If you like the idea of equal taxes across the board then you should take a close look at all the 3rd and 2nd world countries on this planet. Look what benefits it brings to them. Is this the type of world you want to live in? If you had been born in one of these countries then you sure wouldn't have a chance to live the type of life/opportunities you have now. That is reserved for the wealthy 1%.

PS You are not rich enough to think this way.

PSII You are being manipulated.
I have no idea what your talking about or what your comment has to do with anything on this post...

Are you talking about me or someone else?

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