Dbone Posted February 13, 2012 Share Posted February 13, 2012 I thought this was an interesting take on Any Tax Law, and wanted to share. Good to be poor or rich, middle class gets shafted. Please try and keep comments non-political Suppose that every day, ten men go out for beer and the bill for all ten comes to $100 and 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. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." So 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, ladies and gentlemen, 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. I'M NOT SURE WHY THIS CONCEPT IS SO HARD FOR MANY TO UNDERSTAND. IT IS IMPOSSIBLE TO TAX OUR WAY TO PROSPERITY…OR TO A BALANCED BUDGET FOR THAT MATTER! David R. Kamerschen, Ph.D. Professor of Economics University of Anywhere For those who understand, no explanation is needed. For those who do not understand, no explanation is possible. Link to comment Share on other sites More sharing options...
Puros Y Vino Posted February 13, 2012 Share Posted February 13, 2012 Ahem... SNOPES Link Link to comment Share on other sites More sharing options...
Stalebread Posted February 13, 2012 Share Posted February 13, 2012 . and an alternative -- LINK . Link to comment Share on other sites More sharing options...
IcedCanuck Posted February 13, 2012 Share Posted February 13, 2012 Government says they give mega tax breaks to the rich so they will create more jobs. I was always a proponent to this scheme until just recently. Instead of creating jobs with all the money they save on taxes from the tax breaks they downsize (layoffs), outsource jobs, decrease full time jobs and increase part-time jobs. They are not spending the money to create new jobs they are hoarding the money in their bank accounts (that's where the tax break money is going), give CEOs, COOs etc extremely gross bonuses (that's where the tax break money is going) and not creating any new jobs. So if they are supposedly getting tax breaks to create new jobs and instead are stock pilling the cash in their bank accounts and are not creating new full time good paying jobs then I say no more tax breaks. I think companies that outsource should not get any tax breaks either. IMHO the only companies that should ever receive tax breaks are those that create new jobs for people within the country it pays taxes in. Link to comment Share on other sites More sharing options...
Onsto Posted February 13, 2012 Share Posted February 13, 2012 This paradigm only works if the wealthy are paying income tax the same as everyone else does (as employees). In many cases they aren't - Mitt Romney paid less than 14% of his earnings (dividends) in tax last year, and Warren Buffett famously complained that his rate of taxation by percentage was lower than that of his secretary... My 'non political' response is that this misleading description of the taxation system is propaganda. I'm keeping it non political by not identifying who the propagandist is Link to comment Share on other sites More sharing options...
Montaigut Posted February 13, 2012 Share Posted February 13, 2012 Wow! Got brain cramps trying to follow that one... Must be because because of our (Canadian) much simpler tax system!! Link to comment Share on other sites More sharing options...
sloth Posted February 13, 2012 Share Posted February 13, 2012 Link to comment Share on other sites More sharing options...
benjaminbbush Posted February 13, 2012 Share Posted February 13, 2012 Soooo,how's the weather? Link to comment Share on other sites More sharing options...
Dbone Posted February 13, 2012 Author Share Posted February 13, 2012 This paradigm only works if the wealthy are paying income tax the same as everyone else does (as employees). In many cases they aren't - Mitt Romney paid less than 14% of his earnings (dividends) in tax last year, and Warren Buffett famously complained that his rate of taxation by percentage was lower than that of his secretary... That much is true, good point. Link to comment Share on other sites More sharing options...
Dbone Posted February 13, 2012 Author Share Posted February 13, 2012 Ahem... SNOPES Link Thanks for the link Frank I'm not surprised to see the falsified author. Nonetheless, the content provides some food for thought. Link to comment Share on other sites More sharing options...
Dbone Posted February 13, 2012 Author Share Posted February 13, 2012 Wow! Got brain cramps trying to follow that one... Must be because because of our (Canadian) much simpler tax system!! Now that's a reason to move up North Link to comment Share on other sites More sharing options...
cckandb24 Posted February 13, 2012 Share Posted February 13, 2012 deleted...poitical references Link to comment Share on other sites More sharing options...
cckandb24 Posted February 13, 2012 Share Posted February 13, 2012 I'm still not sure where All the envy comes from and why the recent agenda to punish success Link to comment Share on other sites More sharing options...
CaptainQuintero Posted February 13, 2012 Share Posted February 13, 2012 I don't know about you guys, but I sure am glad I don't care about politics, otherwise I could see myself spending a lot of time and energy getting red in the face over something that has not ever and will not ever change. It doesn't matter what your political standing is, politicians will always screw you over no matter what they stand for and no matter what they promise. The best advice I ever heard was from my 96 year old Grandmother: 'Just vote for the person you personally find the least annoying.' Link to comment Share on other sites More sharing options...
Puros Y Vino Posted February 13, 2012 Share Posted February 13, 2012 Thanks for the link Frank I'm not surprised to see the falsified author. Nonetheless, the content provides some food for thought. No problem Dbone. Didn't mean to take a crap on your post. I've read that one and debated over it before. So I wanted to put it out there that the source and the content is somewhat "suspect". The mantra that "only the rich create jobs" is a complete fallacy. Up here in Canada, small businesses create far more jobs than all the multinationals combined, yet they get all the breaks. Link to comment Share on other sites More sharing options...
Dbone Posted February 13, 2012 Author Share Posted February 13, 2012 I'm still not sure where All the envy comes from and why the recent agenda to punish success Its low hanging fruit for the politicians. Link to comment Share on other sites More sharing options...
khomeinist Posted February 13, 2012 Share Posted February 13, 2012 This paradigm only works if the wealthy are paying income tax the same as everyone else does (as employees). In many cases they aren't - Mitt Romney paid less than 14% of his earnings (dividends) in tax last year, and Warren Buffett famously complained that his rate of taxation by percentage was lower than that of his secretary... My 'non political' response is that this misleading description of the taxation system is propaganda. I'm keeping it non political by not identifying who the propagandist is ^^^ THIS Link to comment Share on other sites More sharing options...
fattires Posted February 13, 2012 Share Posted February 13, 2012 I thought this was an interesting take on Any Tax Law, and wanted to share. Good to be poor or rich, middle class gets shafted. Please try and keep comments non-political Yep, not much to argue with there...tax burden by income group seems more meaningful than individual tax rate... Link to comment Share on other sites More sharing options...
Orion21 Posted February 13, 2012 Share Posted February 13, 2012 Uggghhhhhh! In a vacuum this makes sense, but no one lives in a vacuum. If you are an employee making $500k+ then maybe it applies to you, but most people making $500k+ a year are not employees and intern do not pay a set income tax like everyone else. If you own a business or profit from investments in business you are in a completely different tax world full of credits, deductions and deferrals ( ALL 100% LEGAL). And if you are Warren Buffett and feel you don't pay enough tax you can always decide to contribute more than you do . . .but he doesn't. And why is that? Because deep down Warren knows the government will squander his wealth, so he set up his own foundation . . .good for him. The whole discussion of what is a "fair" tax is the biggest joke in the history of politics. When the top 10% pay the vast majority of the tax to run the country and provide benefits and entitlements to those who pay little to nothing they deserve to reap the benefits of tax changes. The only thing not fair about the tax system is the burden put on the top earners to take care of everyone else who can't or won't contribute to the system. Those in the audience who feel obliged to take care of everyone else should be applauded for your charity, but like most handouts it can be a slippery slope. When and where will the line be crossed where those who you are taking care of have little or no motivation to improve their circumstances because of the shear amount of benefits they receive??? Also, when will those with means fail to support the burden put on them by their governments....??? The simple answer is, it already is happening. Look at Euro Zone, Greece et al. Taxes couldn't be higher in most cases and the system is collapsing on itself because those who pay little to nothing into the system are sinking it. Taxation of the upper class is not the answer to prosperity. Empowering those with the means to move money thru the system at an exponential rate should be supported and the black hole of government should be curbed. Only when those who depend on the taxation/charity of others for their livelihood wake up and realize that their open mouths are killing the economic viability of the countries they love so much will things turn around. Link to comment Share on other sites More sharing options...
khomeinist Posted February 14, 2012 Share Posted February 14, 2012 Thanks for the political rant Link to comment Share on other sites More sharing options...
tdlfoto Posted February 14, 2012 Share Posted February 14, 2012 Some of you would be wise to read "Someplace Like America" to gain an insightful and sobering assessment of present times economics, as relayed through stories of the American working class. The folks in line at food banks are working 2 and 3 jobs. This concept that they're free loaders has been brought to you by FOX NEWS et al. http://www.amazon.com/Someplace-Like-America-Tales-Depression/dp/0520262476 Link to comment Share on other sites More sharing options...
Guest rob Posted February 14, 2012 Share Posted February 14, 2012 I love 'judgmentalism' - poor people are free loading, lazy leeches. rich people are hard working,, entrepreneurial good guys. What's a middle class guy like me? Link to comment Share on other sites More sharing options...
IcedCanuck Posted February 14, 2012 Share Posted February 14, 2012 I love 'judgmentalism' - poor people are free loading, lazy leeches. rich people are hard working,, entrepreneurial good guys. What's a middle class guy like me? SCREWED Link to comment Share on other sites More sharing options...
IcedCanuck Posted February 14, 2012 Share Posted February 14, 2012 The 'fairest' system would be for everyone to pay the same income tax rate regardless of your annual income but the rich and the poor would never go for it. Link to comment Share on other sites More sharing options...
CanuckSARTech Posted February 14, 2012 Share Posted February 14, 2012 I love 'judgmentalism' - poor people are free loading, lazy leeches. rich people are hard working,, entrepreneurial good guys. What's a middle class guy like me? Just plain screwed. EDIT - ah, crap, Phil beat me to it!! Link to comment Share on other sites More sharing options...
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