A simple lesson in economics for the tax the rich crowd

[cantdrv55]

I found this on another sports car bbs. I hope it's not a repost. Let me know what you think. Are the splits accurate?

TAX CUTS - A SIMPLE LESSON IN ECONOMICS

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 pay 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.

So, that's what they decided to do. 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 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. 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 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 nine 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 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.

[71T Targa]

Tax The Rich!

[CamB]

That is even older than the internet

If you (or anyone) can magically reduce the size of government without reducing the benefits it offers (the "meal"), then by all means, let's do it.

But you can't, which is all very well for the rich guy who can go buy another meal to top himself up. However, the four men with no money and not enough food... starve.

... welcome to liberal thought patterns. It's not about being "fair" to the guy at the top, it is about making sure the one at the bottom doesn't miss out.

[ubiquity0]

ferrarichat.com?

[cantdrv55]

Originally posted by ubiquity0
ferrarichat.com?

Busted. Sorry for the repost too.

[ErVikingo]

Here's a solution, you mak a lot of money and pay a lot of taxes in only some years. Then, you quit and fire all of your employees. You live out of your accumulated savings and let the next guy working his tail off to maintain the employees you just fired. Um............

Cam I see your point however, its not only the guy at the bottom. Its the guys at the 50% and lower mark mostly.

[RallyJon]

It's not about being "fair" to the guy at the top, it is about making sure the one at the bottom doesn't miss out.

So you're suggesting we don't ask him politely to stay, but duct tape the guy to his chair instead? Gotta love those liberal thought patterns.

[juanbenae]

chris,, will you post one of those "if a train leaves boston traveling 67 and another leaves texas going 83, where will they meet?" questions? i was always good at those because i like toy trains as a boy.....

[ubiquity0]

Where will the rich guy go? France?

[cowtown]

Chris, that's a great example (even if you stole it from ferrarichat )

Californians just passed an increase in tax on millionaires. I'm not one, but I do live around and interact with quite a few. And I'm 3 hours from the Nevada border, where there's no tax.

So the "dinner-payers" like some of my millionaire acquaintances are leaving for the Lake Tahoe area.

I see Cam's point about being fair to the poor, but the poor aren't going to get their free meals this way, either.

[lendaddy]

The rich don't have to "go" anywhere per se. They can(and do) simply remove themselves from the contributing public. They pull a Tabs and live off their investments rather than by starting/expanding companies. Not that investors don't help the economy, but the two paths cannot be compared in economic effect. Note I am not talking about venture capitalistsm, rather people like Theresa Kerry who makes like 70% of her income from tax free municiple bonds. Theresa has effectively walked away from the table, you just don't realize it. When people reach a certain level our system only punishes furthur success, so they just cash in. Believe it.

[84porsche]

Thanks for the example, its good to put things in simpler terms. Tax code alone is quite complicated. Only one question though, was their alcohol included in the tab for the restaurant and who was drinking?

[ErVikingo]

Amen Len.