Posted on 04/25/2007 12:19:47 PM PDT by Michael.SF.
Because it is tax season. . . Let's put tax cuts in terms 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. "Because 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.
Attribution: 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.
ROFL!!! Great post!
And the AMT (alternative minimum tax) hasn’t been touched yet.
You're right! Let's see if we can embellish:
...Now, when the remaining nine men realized that they could not pay the tab, they started debating amongst themselves on how to cover the shortage, and they decided to let the majority decide the issue.
Since the first five men were poor and now constituted a majority of the group, they voted to institute an "Alternative Minimum Tab" that would be paid by anyone who had any money. That minimum was set at $20, and the upper four men picked up the tab.
Obviously, the next night, only five men showed up to drink.
Now that was good. :)
Spot on!
Continuing:
Deprived of their access to the right to consume the beverage of there choice the remaining men wrote a letter to their Congresswomyn, Dianne Pelosi-Boxer, the well known People's Choice candidate from the moderate community of San Bezerkley.
Immediately, Ms. Pelosi-Boxer, introduced a bill in congress to allow for a 'Fair-Tax' Credit to be be applied for the consumption of adult beverages for the remaining men. Ms. Pelosi-Boxer added:
"the real crime here was the misguided attempt by the Captilist Bartender who sought a Price cut and rebate for the super Rich elitists of this group."
Ms. Pelosi-Boxer was not available for further comment as she was for her private jet which was scheduled to take her to Petite Auberge Solelil, the exclusive retreat she and her husband own in California.
bump.
The major diffrence is: The top three or four taxpayers are taxed from their paychecks whether they show up or NOT.
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