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post #1 of 11 (permalink) Old 01-28-2007, 11:41 AM Thread Starter
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Found on another forum, Tax cuts - How they really work

Tax cuts - How they really work

Sometimes Politicians can 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, we hope the
following will help.

Tax Cuts - A Simple Lesson In Economics

This is how the cookie crumbles. Please read it carefully.

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.

So, 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 ea ch 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, 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 $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 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 ones who get the most money back from a
reduction are those who paid in the most. 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, the Caribbean and SE Asia.
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post #2 of 11 (permalink) Old 01-28-2007, 02:16 PM
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You MUST be Republican, Jakarta.

If you aren't, I suggest you go to the local Rep branch and join immediately.
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post #3 of 11 (permalink) Old 01-28-2007, 07:33 PM
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90% of people surveyed favored a tax increase on the other 10%
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post #4 of 11 (permalink) Old 01-28-2007, 07:53 PM
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Originally Posted by maine_coon
You MUST be Republican, Jakarta.

If you aren't, I suggest you go to the local Rep branch and join immediately.
Rather than attack what he said, you choose to attack HIM and his party affiliation. What say you about what he posted?

It is undeniable FACT because I own a business and it is really amazing as to why we are expected to pay over 35% of every profit dollar in taxes. We hear the same lame garbage about how 'we must be doing something wrong' to owe that much. We work our asses off and pay exorbant amounts in taxes while people who pay absolutely nothing at all can get as much as $6,000 in child tax credits. And what cuts the mustard is that some of these same people do not even have a friggin job to begin with. They draw their disability and welfare while breeding under privelaged children into existence in order to turn them into the same unproductive citizens as they are. Then when a tax cut is passed out, these same people bitch about me getting a tax cut. Why do people who pay no taxes at all even expect money back from a tax cut? And people wonder why corporations continue to downsize american labor and move their companies overseas.

BTW, I'm far from 'Rich' and I'm looking forward to the first year I can claim the child tax credit.

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post #5 of 11 (permalink) Old 01-28-2007, 08:49 PM
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Quote:
Originally Posted by cmitch
Rather than attack what he said, you choose to attack HIM and his party affiliation. What say you about what he posted?

It is undeniable FACT because I own a business and it is really amazing as to why we are expected to pay over 35% of every profit dollar in taxes. We hear the same lame garbage about how 'we must be doing something wrong' to owe that much. We work our asses off and pay exorbant amounts in taxes while people who pay absolutely nothing at all can get as much as $6,000 in child tax credits. And what cuts the mustard is that some of these same people do not even have a friggin job to begin with. They draw their disability and welfare while breeding under privelaged children into existence in order to turn them into the same unproductive citizens as they are. Then when a tax cut is passed out, these same people bitch about me getting a tax cut. Why do people who pay no taxes at all even expect money back from a tax cut? And people wonder why corporations continue to downsize american labor and move their companies overseas.

BTW, I'm far from 'Rich' and I'm looking forward to the first year I can claim the child tax credit.
Amen
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post #6 of 11 (permalink) Old 01-28-2007, 08:53 PM
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Quote:
Originally Posted by cmitch
Rather than attack what he said, you choose to attack HIM and his party affiliation. What say you about what he posted?

It is undeniable FACT because I own a business and it is really amazing as to why we are expected to pay over 35% of every profit dollar in taxes. We hear the same lame garbage about how 'we must be doing something wrong' to owe that much. We work our asses off and pay exorbant amounts in taxes while people who pay absolutely nothing at all can get as much as $6,000 in child tax credits. And what cuts the mustard is that some of these same people do not even have a friggin job to begin with. They draw their disability and welfare while breeding under privelaged children into existence in order to turn them into the same unproductive citizens as they are. Then when a tax cut is passed out, these same people bitch about me getting a tax cut. Why do people who pay no taxes at all even expect money back from a tax cut? And people wonder why corporations continue to downsize american labor and move their companies overseas.

BTW, I'm far from 'Rich' and I'm looking forward to the first year I can claim the child tax credit.
cmitch,

I did NOT attack HIM and I have no intention to attack what he said.

It is one of the interpretations, the same Hoover and Reagan and Bush Jr. followed.

In reality things are much more complicated than this.

Just to mention one thing, not the most important, USA had managed to keep the society from unrest ever since the Civil War.

How do you think it was accomplished?

I feel for you. You have to pay 35% for each $ in profit and there are some scums who DO cheat the system.

Yet we do NEED to maintain the balance.
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post #7 of 11 (permalink) Old 01-28-2007, 09:05 PM Thread Starter
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Quote:
Originally Posted by maine_coon
You MUST be Republican, Jakarta.

If you aren't, I suggest you go to the local Rep branch and join immediately.
No Problem there Maine, here in Jakarta I am thinking of putting in the application to setup a Jakarta Branch of the Republican party and see if we can get in on some PAC money and financial support from the Republican Party for our work here.
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post #8 of 11 (permalink) Old 01-28-2007, 09:10 PM
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Originally Posted by Jakarta Expat
No Problem there Maine, here in Jakarta I am thinking of putting in the application to setup a Jakarta Branch of the Republican party and see if we can get in on some PAC money and financial support from the Republican Party for our work here.
LOL bud.
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post #9 of 11 (permalink) Old 01-29-2007, 05:46 AM
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Quote:
Originally Posted by maine_coon
cmitch,

I did NOT attack HIM and I have no intention to attack what he said.

It is one of the interpretations, the same Hoover and Reagan and Bush Jr. followed.

In reality things are much more complicated than this.

Just to mention one thing, not the most important, USA had managed to keep the society from unrest ever since the Civil War.

How do you think it was accomplished?

I feel for you. You have to pay 35% for each $ in profit and there are some scums who DO cheat the system.

Yet we do NEED to maintain the balance.
There is no balance in the tax system. It's like piling 10 children on one side of a see-saw and a baby on the other. The see doesn't saw!

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post #10 of 11 (permalink) Old 01-29-2007, 05:53 AM Thread Starter
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Originally Posted by cmitch
There is no balance in the tax system. It's like piling 10 children on one side of a see-saw and a baby on the other. The see doesn't saw!
Could say the same thing about that shitty Social Security System that is in place now as well. Wait until the baby boomers start retiring very soon.
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