Making Taxs Simpler

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. 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 $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 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."

So, now dinner for the ten only cost $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, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'?

The six men 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 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.

à The fifth man, like the first four, now paid nothing (100% savings) à The sixth now paid $2 instead of $3 (33% savings) à The seventh now paid $5 instead of $7 (28% savings) à The eighth now paid $9 instead of $12 (25% savings) à The ninth now paid $14 instead of $18 (22% savings) à 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 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 $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 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 at the table anymore. There are lots of good restaurants in Europe and the Caribbean.

David R. Kamerschen, Ph.D. Professor of Economics 536 Brooks Hall University of Georgia

SIMPLER:

Every person in the Nation is supposed to receive the same services from the government.

Every person should pay the exact same amount FOR those exact, same services.

Every person should pay $X for X services.

IE: Each person should pay $1000/year. Two people in the family should pay $2000. Three people in the family should pay $3000.

THAT is the only fair way.

It is simple, and it is logical.

IE: Each person should pay $1000/year. Two people in the family should pay $2000. Three people in the family should pay $3000.

I'd have to think about that for a while. I like the idea of a sales tax instead. Anyway, the point of my response is to point this out to you: If you divide the number of people in the USA (all ages) by this year's federal budget you'll see that we're currently paying an average of more than $7,500 per year each - that includes kids mind you. Also note that the $7,500 figure doesn't include state or local taxes. We're being raped.

3 posted on 09/17/2004 2:40:52 PM PDT by Jaysun (The probability of someone watching you is proportional to the stupidity of your action)

The first four men (the poorest) 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

Kamerschen misleadingly allows the reader to assume that all 10 men are eating the same meal.
To be a more accurate analogy, the first four men would be eating the complimentary soda crackers and ice water, while the 10th man would be dining on caviar, truffles and foie gras.

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