Oh so true (your tax queries)
Finally, taxation has been explained!
Oh how true it is.
You've heard the cry: "It's just a tax cut for the rich!", and it is
accepted as fact. But what does that really mean?
The following may help...
Suppose that every day, 10 people go out for dinner. The bill for all 10
comes to $100. They decided to pay their bill the way we pay our taxes, and
it went like this:
* The first four people (the poorest) paid nothing.
* The fifth paid $1.
* The sixth $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth person (the richest) paid $59.
All 10 were quite happy with the arrangement, until one day, the owner
said: "Since you are all such good customers, I'm going to reduce the cost
of your daily meal by $20." So now dinner for the 10 only cost $80.
The group still wanted to pay their bill the way we pay our taxes.
The first four people were unaffected. They would still eat for free. But
how should the other six, the paying customers, divvy up the $20 windfall
so that everyone would get their "fair share"?
They realised that $20 divided by six is $3.33. But if they subtracted that
from everybody's share, then the fifth and sixth men would each end up
being paid to eat. The restaurateur suggested reducing each person's bill
by roughly the same percentage, thus:
* The fifth person, like the first four, now paid nothing (100% saving).
* The sixth paid $2 instead of $3 (33% saving).
* The seventh paid $5 instead of $7 (28% saving).
* The eighth paid $9 instead of $12 (25% saving).
* The ninth paid $14 instead of ?8 (22% saving).
* The tenth paid $49 instead of $59 (16% saving).
Each of the six was better off, and the first four continued to eat for
free, but outside the restaurant, the people began to compare their
savings.
"I only got a dollar out of the $20," declared the sixth person. He pointed
to the tenth person "but she got $10!"
"That's right," exclaimed the fifth person. "I only saved a dollar too.
It's unfair that she got ten times more than me!"
"That's true!" shouted the seventh person. "Why should she get $10 back
when I got only $2? The wealthy get all the breaks!
"Wait a minute," yelled the first four people in unison. "We didn't get
anything at all. The system exploits the poor!" The nine people surrounded
the tenth and beat her up.
The next night the tenth person didn't show up for dinner. The nine sat
down and ate without her, but when they came to pay the bill, they
discovered that they didn't have enough money between all of them for even
half of it.
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 Monaco and the Caribbean.
With thanks to David R. Kamerschen, Professor of Economics, University of
Georgia
Oh how true it is.
You've heard the cry: "It's just a tax cut for the rich!", and it is
accepted as fact. But what does that really mean?
The following may help...
Suppose that every day, 10 people go out for dinner. The bill for all 10
comes to $100. They decided to pay their bill the way we pay our taxes, and
it went like this:
* The first four people (the poorest) paid nothing.
* The fifth paid $1.
* The sixth $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth person (the richest) paid $59.
All 10 were quite happy with the arrangement, until one day, the owner
said: "Since you are all such good customers, I'm going to reduce the cost
of your daily meal by $20." So now dinner for the 10 only cost $80.
The group still wanted to pay their bill the way we pay our taxes.
The first four people were unaffected. They would still eat for free. But
how should the other six, the paying customers, divvy up the $20 windfall
so that everyone would get their "fair share"?
They realised that $20 divided by six is $3.33. But if they subtracted that
from everybody's share, then the fifth and sixth men would each end up
being paid to eat. The restaurateur suggested reducing each person's bill
by roughly the same percentage, thus:
* The fifth person, like the first four, now paid nothing (100% saving).
* The sixth paid $2 instead of $3 (33% saving).
* The seventh paid $5 instead of $7 (28% saving).
* The eighth paid $9 instead of $12 (25% saving).
* The ninth paid $14 instead of ?8 (22% saving).
* The tenth paid $49 instead of $59 (16% saving).
Each of the six was better off, and the first four continued to eat for
free, but outside the restaurant, the people began to compare their
savings.
"I only got a dollar out of the $20," declared the sixth person. He pointed
to the tenth person "but she got $10!"
"That's right," exclaimed the fifth person. "I only saved a dollar too.
It's unfair that she got ten times more than me!"
"That's true!" shouted the seventh person. "Why should she get $10 back
when I got only $2? The wealthy get all the breaks!
"Wait a minute," yelled the first four people in unison. "We didn't get
anything at all. The system exploits the poor!" The nine people surrounded
the tenth and beat her up.
The next night the tenth person didn't show up for dinner. The nine sat
down and ate without her, but when they came to pay the bill, they
discovered that they didn't have enough money between all of them for even
half of it.
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 Monaco and the Caribbean.
With thanks to David R. Kamerschen, Professor of Economics, University of
Georgia
All Categories
Womens Interests
110
Automotive
122
Home & Family
880
Career
167
Real Estate
470
Food & Drink
451
Finance
423
Internet & eBusiness
3776
Spirituality
54
Legal
149
Book Reviews
42
Gaming
246
Communications
153
Marketing
3279
Health & Medical
2882
Affiliate Marketing
1551
Kids & Teens
20
Relationships
146
Entertainment
223