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Tax cuts even liberals might understand.

Posted on 10/15/2003 11:51:47 AM PDT by flyingx

This has probably been around a while but it is new to me and interesting in light of all of the criticism of President Bush’s tax proposals.

Tax reductions that even liberals might understand:

Suppose that every day 10 men go to dinner. The bill for all 10 comes to $100.

If it was paid the way we pay our taxes, the first four men 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.

The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve.

He said, "Since you are all such good customers, I'm going to reduce the cost of your daily meal by $20."

Now dinner for the ten only costs $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share?

The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth man and the sixth man would end up being paid to eat their meal. 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 $59.

Outside the restaurant, the men began to compare their savings.

"I only got a dollar out of $20," declared the sixth man pointing to the tenth, "and 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 only got $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 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 were $52 short!

And that is a fairly accurate representation of how our current 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.

There are lots of good restaurants in Switzerland and the Caribbean.

TOPICS: Business/Economy
KEYWORDS: again; andagain; federaltaxes; notthisagain

1 posted on 10/15/2003 11:51:47 AM PDT by flyingx
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To: flyingx


The Cubs fan (front center) who tried to catch a foul ball hit by Florida Marlins (news) Luis Castillo (news) sits in the stands in the eighth inning of Game 6 of the National League (news) Championship Series in Chicago, October 14, 2003. The ball would have been the Cubs second out of the inning and the Marlins went on to score 8 runs in the inning. The Marlins defeated the Cubs 8-3 to even the series at three games apiece. REUTERS/Allen Fredrickson



2 posted on 10/15/2003 12:25:05 PM PDT by metalboy (Liberals-Nuke `em from orbit. It`s the only way to be sure.)
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To: All
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3 posted on 10/15/2003 12:25:29 PM PDT by Support Free Republic (Your support keeps Free Republic going strong!)
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