Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: PoliSciStudent
The rich "own" most of the wealth in this country? What does that even mean? Who created the wealth?

Here's a nifty little parable that illustrates the folly of your redistributionist tendencies:

Let's put tax cuts in terms everyone can understand. Suppose that every day 10 men go to a restaurant for dinner. The bill for all ten 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 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement - until 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." Now dinner for the 10 men 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 and sixth men would end up being paid to eat their meal! The restaurant owner suggested that it would be only 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 now 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. "Hey, I only got a dollar out of the $20," complained 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 got only $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." So, the nine men surrounded the tenth and beat him up. The next night he 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 really important. They were $52 short!

And that, boys, girls and college instructors, is how America's 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 might not show up at the table any more. There are lots of good restaurants in Switzerland and the Caribbean!

It's just about that simple. The rich guy has more because he has earned more and created more. He even pays more for the basic services that everyone else enjoys. Yet the other 9 always want to beat him to a pulp. Pretty soon, he won't want to sit at the same table.

Or, as in Atlas Shrugged, he may just withdraw from the game all together.

147 posted on 02/13/2004 6:39:06 PM PST by Choose Ye This Day (Then: "Ask not what your country can do for you" Now: "You sit down. You had your say.")
[ Post Reply | Private Reply | To 1 | View Replies ]


To: MNLDS
The rich guy has more because he has earned more and created more.

Or he inherited more --- but those I don't envy at all because there can't be much real pride in doing nothing but inheriting your wealth. At least the types who got rich from working and creating can be envied and respected for their abilities but they tend to come from the middle class --- not the inherited wealth class.

158 posted on 02/13/2004 6:56:39 PM PST by FITZ
[ Post Reply | Private Reply | To 147 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson