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Thread: Tax Breaks....

  1. #1
    Join Date
    Mar 2003
    Duluth MN

    Tax Breaks....

    If this has been previously posted.. I'm sorry...

    Sometimes Politicians can exclaim; "It's just a tax cut for the rich!", and it is just accepted to be fact. But what does that really mean? Just in case you are not completely clear on this issue, we hope the following will help.

    Tax Cuts - A Simple Lesson In Economics

    This is how the cookie crumbles. Please read it carefully. 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.

    So, 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.

    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 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 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 ones who get the most money back from a reduction are those who paid in the most. 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
    Distinguished Professor of Economics
    536 Brooks Hall
    University of Georgia

  2. #2
    Join Date
    Mar 2003
    Duluth MN
    and then:
    Democrat tax cut explained in layman terms

    If you don't understand the Democrats' version of tax cuts (and you are not alone), this will help explain it for you:

    50,000 people go to a baseball game, but the game was rained out. A refund was then due.

    The team was about to mail refunds when the Congressional Democrats stopped them and suggested that they send out refund amounts based on the Democrat National Committee's interpretation of fairness. After all, if the refunds were made based on the price each person paid for the tickets, most of the money would go to the ticket holders of the most expensive tickets.
    That would be unconscionable.

    The DNC plan says:
    People in the $10 seats will get back $15, because they have less money to spend. Call it an "Earned" Income Ticket Credit". Persons "earn" it by demonstrating little ambition, few skills and poor work habits, thus keeping them at entry-level wages.

    People in the $25 seats will get back $25, because that's only fair.

    People in the $50 seats will get back $1, because they already make a lot of money and don't need a refund. If they can afford a $50 ticket, then they must not be paying enough taxes.

    People in the $75 luxury seats will have to pay another $50, because they have way too much to spend.

    The people driving by the stadium who couldn't afford to watch the game will get $10 each; even though they didn't pay anything, they need the most help.

    Now do you understand? If not, contact your Democrat leadership for assistance.

  3. #3
    Join Date
    Feb 2003
    Interesting read.

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