The Truth About Taxes
by Anonymous, and edited by this website's author
Let's put tax cuts in terms everyone can understand. Suppose that every day, 10 men go out for dinner. The total bill comes to $200.
The first four men.....the poorest.....would pay nothing; (40% of Americans
pay no income taxes at all.)
The fifth would pay $4:
The sixth would pay $8;
The seventh $12;
The eighth $16;
The ninth $26.
The tenth man.....the richest......would pay $134. (In 2000, wealthiest 10% in America paid 67% of all income taxes collected by the Federal Government)
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 upset their payment arrangements.
"Since you are all such good customers," he said, "I'm going to reduce the total cost of your daily meals by $40."
(Note: The Bush tax cut planned for 2003 is not 20% of the tax bill, so the planned tax cut is exaggerated to make the point, and to simplify the math!)
Now dinner for the ten only cost $160. The group still wanted to pay their bill the way we pay our taxes, as much as possible.
So the first four men were unaffected. They would still eat free.
But what about the other six........the paying customers? How could they divvy up the $40 windfall so that everyone would get his "fair share?"
The six men realized that $40 divided by six is $6.66. But if they subtracted that from everybody's share, then the sixth man would end up being "paid" to eat. They knew that it would be unfair, since he would be the only one 'paid' to eat, as four others worse off than him only got to eat free, and didn't get any money.
They also didn't want to give the tenth man all the discount, because even though he would go from paying $134 to $94, the rest would get no benefit from the restaurant owner's generosity, and they believed they deserved to benefit, too.
To their credit, they wanted to have all of the paying customers have a better deal, (the four eating free couldn't possibly have a better deal, according to the other six).
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 he proposed that:
The fifth man also ate for free, instead of paying $4.
The sixth would pay $4, instead of paying $8.
The seventh would pay $8, instead of paying $12.
The eighth would pay $12, instead of paying $16.
The ninth would pay $22, instead of paying $26.
And the tenth man would pay $114 instead of paying $134.
Each of the six was better off than before. And the first four continued to eat at no charge, their meals were paid for by the other six, but remained free to them.
They were so hungry and excited, that they agreed to the plan! They enjoyed the meal, paid the bill, by the new schedule, and once outside the restaurant, the men began to compare their savings.
- "I only got 4 dollars out of the $40," declared the sixth man, "but," pointing to the tenth man, he said "he got $20."
- "Yeah, that's right," exclaimed the fifth man. "I only saved 2 dollars, too. It's unfair that he got a lot more than I did!"
- "That's true!" shouted the seventh man. "Why should he get $20 back when I got only $4? 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 so verbally abused him, that he called a cab and left.
The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him.
And that, boys and girls, journalists and college instructors, politicians and other freeloaders, is how the federal tax system works in the United States of America in the year 2000. (For 2010, the numbers would be only slightly different.)
What many do not realize is that the people who pay the highest taxes ARE SUPPOSED TO get the most benefit from a tax reduction, because everyone else is already eating off of their labors and successes anyway. This is the nature of a graduated income tax, designed by Socialists in the 1800's to help "spread the wealth".
Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. They move to other cities, having dinner with other friends, and then you condemn them for saving a lot of money on their dinner!
It's not about politics, which you can argue for days on end. It's about economics. If the ones footing the bill are demonized and tortured, how long will they "eat dinner with you"? Think about it, and don't bite the hand the feeds you!
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