The True Story of Taxes

Discussion in 'Politics' started by Salty, Nov 20, 2012.

  1. Salty

    Salty
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    We have four years to get this message to liberals

    [SIZE=+1]The True Story of Taxes [/SIZE]



    Let's put tax cuts in terms everyone can understand. Suppose that every day, 10 men go out for lunch and the bill for all 10 comes to $100.

    If they paid their bill the way we pay our taxes, using the progressive tax formula, the billing would go 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, the majority of the men voted democratically to do that.
    The 10 men ate in the diner every day and seemed quite happy with the arrangement, until one day the diner owner surprised them. "Since you are all good customers," he said, "I'm going to reduce the cost of your daily dinner by $20. Lunch for 10 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 eat for free. But what about the other six men, the paying customers? How could they divide the $20 windfall so everyone would get his fair share?? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's bill, then the fifth man and the sixth man would each end up being paid to eat. That didn't seem fair.

    So, the owner suggested reducing each man's bill using the US tax formula.

    Then he presented the amounts each should pay.
    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now paid $2 instead of $3 (savings 33%).
    The seventh now pay $5 instead of $7 (savings 28%).
    The eighth now paid $9 instead of $12 (savings 25%).
    The ninth now paid $14 instead of $18 (savings 22%).
    The tenth now paid $49 instead of $59 (savings only 16%).

    Each of the six was better off than before and the
    first four continued to eat for free. But outside the
    diner, the men compared their savings without any sense of thanks. "I only got a dollar out of the $20," declared the sixth man. He pointed enviously to the tenth man, "but richie got $10!" "That's right," exclaimed the fifth man. "I only got a dollar back. It's unfair that the richest guy got ten times more than I got!" "Yeah!" 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 did not get anything at all. The US system exploits the poor!" Then the nine men surrounded the tenth and beat him up. The next day the tenth man didn't show up for lunch, so the nine ate without him. But when it came time to pay the bill, which was $72 -they discovered something important. They only had 51 dollars which only covered 70% 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 eating in Canada where the atmosphere is friendlier. And then they might even move there or to a tax friendly country.

    Rush Limbaugh and Tom Golisano both moved to Florida to escape the high NY State Taxes.

     
  2. OldRegular

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    Now Salty if you will correct the OP for the tax on dividende we will be getting somewhere!
     
  3. InTheLight

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    An amusing, but flawed story. The story compares percentages with gross amounts, which is flawed.

    Everybody who had paid previously got a reduction in their portion of the lunch tab. The poorest people got the highest percentage of cost reduction. The richest one got the least amount of percentage cost reduction.

    In reality, the Bush tax cuts gave the wealthiest the highest percentage of tax rate reduction. I'm not seeing the correlation with reality and this story.

    Furthermore, the lunch bill was reduced by 20%. So why did the rich guy only get a reduction of 16% while the poorer guy (#6) got a 33% reduction?

    The argument should have centered on the fairness of the percentage reduction in each person's share, not the gross amount of reduction that each received.
     
  4. Salty

    Salty
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    That, my friend is one of the main points of the story
     
  5. OldRegular

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    The Bush tax cuts expired in 2010. They were renewed by the democrat House and democrat Senate and signed into law by Obama. So they are the Obama Tax cuts. It is sad that people seem unaware of this truth.

    http://www.politicsdaily.com/2010/1...-extend-all-bush-tax-cuts-renew-unemployment/
     
  6. billwald

    billwald
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    The fifth makes $10/hour and would pay $1. (more or less)
    The sixth makes $20/hour and would pay $3. ditto
    The seventh makes $30/hour would pay $7. ditto
    The eighth makes $100/hour would pay $12. ditto
    The ninth makes $1500/hourwould pay $18. ditto
    The tenth man (the richest) makes an equivalent of $10,000/hour would pay $59. ditto
     
  7. Oldtimer

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    The tenth man (the richest) makes $1501/hour would pay $59. ditto

    Why?

    John earns $1.00 - the government takes 10 pennies.
    Bob earns $2.00 - the government takes 15 pennies from each dollar.
    Ralph earns $5.00 - the government takes 25 pennies from each dollar.

    That isn't "fair" in the first place. It's redistribution of the wealth.

    If the feds lower the rates a bit, and gives Ralph little lessor percentage than Bob, it still isn't "fair". Bob is still giving fewer pennies per dollar than Ralph is forced to give.

    Why aren't these arguments centered around the portion of total tax dollars received by the feds based on a division of income levels, like the one presented in the OP?

    Simply talking about percentages doesn't present the whole story.
    (For the moment I'm ignoring loop holes and such with regards to total income.)

    What percentage of the total tax paid was the tenth man's portion?.

    Break it down by brackets.

    Number of >> Income > Tax $ >> % of >> % of Total
    Payers >>>> Bracket > Paid >> Income >> Received

    The visual would be even more impressive if presented in a color coded pie chart format.

    It's a form of the old 80/20 rule in play. Yet, that isn't brought into play with regards to total income tax dollars extracted from the public.
     
    #7 Oldtimer, Nov 21, 2012
    Last edited by a moderator: Nov 21, 2012
  8. Aaron

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    The message that conservatives don't seem to get is that the liberals already know. It's their goal.

    Jesus told the the true story of taxes:

    Jesus: Of whom do the kings of the earth take custom or tribute? of their own children, or of strangers?

    Peter: Of strangers.

    Jesus: Then are the children free.

    Now, do you really think that the libs will cede their usurpation of our liberties simply because we are on the right side of the argument?
     
  9. Salty

    Salty
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    Not sure what your point is?

    In this story the men agreed to pay for their meals on a sliding scale - and that is fine because it was voluntarily

    With Taxes - it is required - by the force of law.
    But there is even more to the story.
    IMHO- those paying taxes would not mind paying more for the CONSTITUTIONALLY REQUIRED funds to run the govt - the problem is the ever expanding programs the govt starts - (and many that should have ended years ago) that are NOT constitutionally allowed by the federal govt.
     
  10. just-want-peace

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    bingo, slam dunk, amen!!!!!!!!!
     
  11. Salty

    Salty
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    OT brings up some good points
     

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