The Truth About Taxes

adioking · #1 () 08-24-2006, 02:57 PM

I found this on another site and thought it was interesting:

"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 only 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, Liberals cannot grasp this straight-forward logic!

Randy · #2 () 08-24-2006, 03:05 PM

First of all, this should be in the free for all section (The Cocktail Lounge), since it doesn't have anything to do with being a poker affiliate.

Second, it's a totally oversimplified and nonsensical treatment of our tax system. If you want to read a real discussion of tax cuts and our tax system, written by one of the two wealthiest men in America, take a look at http://www.washingtonpost.com/ac2/wp...&notFound=true. Written by Warren Buffett, who has more to gain from tax cuts for the rich than just about anyone but Bill Gates.

Georgia Poker · #3 () 08-24-2006, 03:10 PM

I agree with Randy, you can't look at the tax system in such an esoteric way. It's just not that cut and dry...

I pay more in taxes each year than the median family income for the US but you won't hear me complaining about it.

PPP · #4 () 08-24-2006, 04:24 PM

Isn't their a "bad junior college bungling of economic logic forum"?

mongoose · #5 () 08-26-2006, 01:34 PM

adio, that is an oversimplified scene. the warren buffet article isn't on target either. he should know better than to use himself to present a completely out of whack picture.

that said, he's still a lovable guy.

georgia, i'm not with ya. in paying taxes, the only satisfaction i find is that i've paid for the right to bitch about it. nothing spurs me out of bed and into a hard day's labor like the prospect of keeping nearly 60 cents on the dollar for my efforts.

losercore · #6 () 08-27-2006, 03:53 PM

I loved it Adio. It's not comparing our taxes to eating dinner. It's making it simple for people to understand what happens in general in our tax system.

It's called an analogy.

Anything to get the Liberal's blood boiling works for me. Thanks Adio