Posted on 11/05/2008 7:22:16 AM PST by rla7137
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 dayk, 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 ‘fare 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 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 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 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 Ga
Yes because we all know he who has the most money at the end wins.
No, I haven’t seen that Stern video. Several times, I heard Sean Hannity ask callers why they supported Obama, and the callers said, “He wants to bring change.” Sean said, “What kind of change?” The callers said, “I don’t know what kind, but I’ll vote for him.”
There is a Obama supporter on our local radio right now, saying that Capital Gains is related to war spending.
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Oh there will be a million excuses, targeted at the mindless and braindead, as to why our taxation will go totally out of control -— but the sooner they bankrupt the economy, the sooner we can get the Marxists out of control and get back to the real America (assuming we can get some REAL conservative leadership back in Washington).
That pretty well sums it up. Hunker down.. we’re all just along for the ride for the forseeable future.
The 10th guy has options.
1. Works less or retires.
2. Has less to reinvest in his business so business does not grow or declines.
3. Cuts expenses, such as firing/hiring in lower tax area/country.
4. Raises prices, so that buyer pays for additional taxes.
5. Invests in different area so to receive lower taxed income.
6. Sets up a non profit to avoid taxes.
7. Other craetive method.
You are right that the taxpayer in the middle is stuck with higher taxes and less income. This is what they voted for.
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