Tax Cuts - From the Poor to The Rich

[Run To State]

From an article, not sure from what, I found it on 55 KRC's website.

 

Since it is tax season let's put tax cuts in terms almost everyone can understand.

 

 

 

 

Suppose that every day, ten men go out for beer 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:

 

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 drank in the bar 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 beer by $20."Drinks 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 drink 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 drink his beer.

 

So, the bar 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 pay $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 drink 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 I!"

 

"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 nine men surrounded the tenth and beat him up.

 

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers 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 drinking overseas where the atmosphere is somewhat friendlier.

 

David R. Kamerschen, Ph.D.

Professor of Economics

University of Georgia

 

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

[woodsrider]

Great article.

 

The president of our company emailed everyone an article that explained percentage of tax paid by each class. It was very interresting. Everyone complains about the rich getting all the breaks. But what is more interresting is that the top 1% of households pay more than 25% of the federal tax liabilities. The top 10% pay more than 50% and the top 20% pay more than two thirds of the federal tax liabilities.

[Run To State]

^ Yeah, there are those who just suffer from class envy. They don't care that the "rich" pay a large percentage, they want them to foot darn near the entire bill.

[Habib]

I've seen that a million times and havn't bothered to "snopes" it yet, but I doubt that professor is either real or wrote that.

 

Regardless, it reminds me of a quote from Deng Xiaoping "I have two choices: to distribute poverty or to distribute wealth."

[rockmom]

I've seen that a million times and havn't bothered to "snopes" it yet, but I doubt that professor is either real or wrote that.

 

Regardless, it reminds me of a quote from Deng Xiaoping "I have two choices: to distribute poverty or to distribute wealth."

 

We don't always agree, but that gets a :thumb: :thumb: from me! (Not that it's important to anyone, but....:lol:)

[RowdyRedRam]

This arguement is a bunch of poo.

 

If being rich is so bad why are we all trying to get there.

 

If you have obtained wealth you have benifited from a system of laws, systems, and orders that have allowed your property to be protected and rights to be upheld, without finacially supporting those you risk losing that wealth.

 

Also keep in mind that the wealthest top percentage owns a larger percentage of the nations wealth than percentage they pay in taxes.

 

Furthermore than is no bigger indicator of the weath bracket that you end up in than the wealth bracket you come out of, somewhere that has to point to the fact that there are pathways and opprituinities more accessable to wealthy children than less wealthy children.

 

You won't see me shedding tears for any millionaires, they aren't that hard up.

[goherd96]

No they aren't hard up, but why does the left feel compelled to take their wealth and paint them as evil people who aren't entitled to it?

[goherd96]

I've seen that a million times and havn't bothered to "snopes" it yet, but I doubt that professor is either real or wrote that.

 

Regardless, it reminds me of a quote from Deng Xiaoping "I have two choices: to distribute poverty or to distribute wealth."

 

The professor is real, but he denies writing it. Another professor sometimes credited with the work denied writing it but said he had distributed it to his class. There are numerous people credited with the writing, but snopes has not yet found the true origin. Nevertheless, it is an interesting analogy for our convoluted tax system.

[RowdyRedRam]

No they aren't hard up, but why does the left feel compelled to take their wealth and paint them as evil people who aren't entitled to it?

The article is painting them as victims, which is just as wrong.

[strike-3]

I've seen that a million times and havn't bothered to "snopes" it yet, but I doubt that professor is either real or wrote that.

 

Regardless, it reminds me of a quote from Deng Xiaoping "I have two choices: to distribute poverty or to distribute wealth."

 

He's real.

 

http://www.terry.uga.edu/profiles/?person_id=435

 

Whether he wrote the article or not, I have no idea. I guess you could e-mail him and ask.

[Run To State]

I've seen that a million times and havn't bothered to "snopes" it yet, but I doubt that professor is either real or wrote that.

 

Regardless, it reminds me of a quote from Deng Xiaoping "I have two choices: to distribute poverty or to distribute wealth."

By distribute wealth are you saying that the rich should be punished for being successful? A lot of those who have nothing is because of their own laziness. Should hard working people have to support that?

[swamprat]

It doesn't matter who wrote it. The math still works the same.

[Run To State]

It doesn't matter who wrote it. The math still works the same.

:thumb:

[H]

That's all well and good, but why are we even talking about tax cuts when we are spending beyond our means and sending the bill to your kids and mine?

[75center]

Since the debt has increased every year since 1960 this is not the first generation that is in that boat.