This came around today, and I thought it was apropos:

 

When explained like this, it is much easier to understand.

Taxing the People

Sometimes politicians, journalists and the liberal left 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, I hope the

following 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 all ten

comes to $100. If they paid their bill the way we pay our taxes, it would

go something like this:

o The first four men (the poorest) would pay nothing.

o The fifth would pay $1

o The sixth would pay $3

o The seventh would pay $7

o The eighth would pay $12

o The ninth would pay $18

o 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. But what

about the other six men - the paying customers? How could they divide the

$20 windfall so that everyone would get his "fair share?"

They 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:

o The fifth man, like the first four, now paid nothing (100% savings)

o The sixth now paid $2 instead of $3 (33% savings)

o The seventh now paid $5 instead of $7 (28% savings)

o The eighth now paid $9 instead of $12 (25% savings)

o The ninth now paid $14 instead of $18 (22% savings)

o The tenth now paid $49 instead of $59 (16% savings... the least

proportionate 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 two? 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 first 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 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 anymore. In fact, they might start eating overseas

where the atmosphere is somewhat friendlier.

 

David R. Kamerschen, Ph.D

Professor of Economics

University of Georgia

Excellent article.

Excellent article.

:thumb:

Excellent...

Excellent explanation, Heresay. My only addendum would be to mention that the first five also get to collect and keep the tip. This would, of course, refer to the earned income credit which allows those who pay little or no taxes to get back big refunds far in excess of what was withheld from their paychecks.

Excellent explanation, Heresay. My only addendum would be to mention that the first five also get to collect and keep the tip. This would, of course, refer to the earned income credit which allows those who pay little or no taxes to get back big refunds far in excess of what was withheld from their paychecks.

 

Don't forget their HUD check for their rent and their PELL Grant for their college tuition. Plus #10 probably got socked with AMT and had his deductions phased out.

ok...Let's say these men work for the same company and the total payroll for that company is 3,000,000.00.

 

Toss out the first 4, total income is only 20K each / 80K total

 

5th man earns 30,000.00 a year

6th man earns 90,000.00 a year

7th man earns 210,000.00 a year

8th man earns 360,000.00 a year

9th man earns 540,000.00 a year

10th man earns 1,770,000.00 a year

 

With no real disposable income until you are at the 6th man's level, and the first five shouldn't be dinning out anyway, never the less you can see the drastic income and bennefit jumps are built in the structure and therefore, i will not lose much sleep seeing the 10th man pay half the tab.

ok...Let's say these men work for the same company and the total payroll for that company is 3,000,000.00.

 

Toss out the first 4, total income is only 20K each / 80K total

 

5th man earns 30,000.00 a year

6th man earns 90,000.00 a year

7th man earns 210,000.00 a year

8th man earns 360,000.00 a year

9th man earns 540,000.00 a year

10th man earns 1,770,000.00 a year

 

With no real disposable income until you are at the 6th man's level, and the first five shouldn't be dinning out anyway, never the less you can see the drastic income and bennefit jumps are built in the structure and therefore, i will not lose much sleep seeing the 10th man pay half the tab.

 

I don't know how you extrapolated INCOME from TAX RATES, but O.K.

 

The 10th man didn't mind PAYING more than half the tab. What we are talking about is when there is a REFUND, how the REFUND should be distributed. So you are talking apples and oranges.

I don't know how you extrapolated INCOME from TAX RATES, but O.K.

 

The 10th man didn't mind PAYING more than half the tab. What we are talking about is when there is a REFUND, how the REFUND should be distributed. So you are talking apples and oranges.

 

Income based on percentage paid. And yes, the 10th man pays more, but he reeps the most bennefits. The opportunity to earn even more income by investing, dividens, savings intrest ect. The first five of 6 men can't afford to invest.

Income based on percentage paid. And yes, the 10th man pays more, but he reeps the most bennefits. The opportunity to earn even more income by investing, dividens, savings intrest ect. The first five of 6 men can't afford to invest.

 

I have absolutely no idea what you mean by "income based upon percentage paid."

 

The 10th man pays more in TAXES. He reaps more benefits from his higher INCOME, sure. Again, you still haven't answered the question about why the lower tax bracket folks should get more of a REFUND.

 

Also, is it unfair that the 10th man has a higher income? Is that what you are saying? I guess I just don't understand you. The 10th man is not arguing that his tax percentage being higher is unfair. But when there is a tax REFUND, he should get the same percentage back.

Income based on percentage paid. And yes, the 10th man pays more, but he reeps the most bennefits. The opportunity to earn even more income by investing, dividens, savings intrest ect. The first five of 6 men can't afford to invest.

 

Like I said in another post DD...there's nothing wrong with being intelligent and working with your head instead of your hands.

 

And for the final time...the rich receive NO EXTRA benefits. They SAME opportunities and "benefits" afforded to the rich are also afforded to those less fortunate.

I have absolutely no idea what you mean by "income based upon percentage paid."

 

The 10th man pays more in TAXES. He reaps more benefits from his higher INCOME, sure. Again, you still haven't answered the question about why the lower tax bracket folks should get more of a REFUND.

Also, is it unfair that the 10th man has a higher income? Is that what you are saying? I guess I just don't understand you. The 10th man is not arguing that his tax percentage being higher is unfair. But when there is a tax REFUND, he should get the same percentage back.

 

It is called redistribution of wealth. The Dems are big on it...

It is called redistribution of wealth. The Dems are big on it...

Halleluiah....Halleluiah....Halleluiah:thumb:

Like I said in another post DD...there's nothing wrong with being intelligent and working with your head instead of your hands.

 

And for the final time...the rich receive NO EXTRA benefits. They SAME opportunities and "benefits" afforded to the rich are also afforded to those less fortunate.

 

The same opportunity ??? Show me how the first five men can have the opportunity to invest and gain dividen income. Nothing wrong with being the number 10 man, we all strive for that. 300,000,000 Americans can't be numer ten men. And if you are trying to tell us all 300 million Americans have the same opportunities then you have no ideal of society. Can't all be chiefs.

And there is certainly nothing wrong with working with your hands.

The same opportunity ??? Show me how the first five men can have the opportunity to invest and gain dividen income. Nothing wrong with being the number 10 man, we all strive for that. 300,000,000 Americans can't be numer ten men. And if you are trying to tell us all 300 million Americans have the same opportunities then you have no ideal of society. Can't all be chiefs.

And there is certainly nothing wrong with working with your hands.

Never said that there is anything wrong with working with your hands...but dont sit and say that they have opportunities others dont. ANYONE can invest and make dividends. They might have to make sacrifices but ANYONE can invest. And your right everyone cant be a chief...the world does need ditch diggers...but dont set back and hate the chief.