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Tax cuts - How they really work

Discussion in 'The Dungeon' started by Paige, Mar 5, 2004.

  1. Paige

    Paige BBS FF Champ

    I got this off another message board. Very good read indeed! :)



    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, I hope the following will help.

    Tax Cuts - A Simple Lesson In Economics

    This is how the cookie crumbles. 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
     
  2. Tunersricebowl

    Tunersricebowl Fog, onward through.

    What really scares me the most is the possibility of the super rich having to cut down on the time they spend on vacation in aruba from six weeks to five. How dreadfull. Let the streets and bridges crumble,don't tax the rich,let the veterans eat dirt,don't tax the rich,let the healthcare "system" go to pot,don't tax the rich.Excuse me,I must spend some time alone praying for that most unfortunate group amongst us,the rich.
     
  3. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

    Good analogy, but lost on people like Turnersricebowl.
    They don't understand the concept of killing the goose that lays the golden egg.
    But they will blame the one who killed the goose for them when no more eggs are to be had.
     
  4. Tunersricebowl

    Tunersricebowl Fog, onward through.

    Yep,when the golden egg dropped out of the goose's ass it missed me by inches,landing in a better padded nest. I wonder why that moron that started microsoft agrees that tax cuts for the rich is a bad idea.Next thing you know,outsourcing jobs to slave labor camps in china will be frowned upon. Perhaps the rich do need that extra week in aruba,what with all the noise the lower classes are starting to make.Hell if we killed the goose,at least we would get a meal out of it.
     
  5. HPPT

    HPPT !!!

    Does a rich person inflict more wear & tear to a bridge when they cross than an average person does? Is it more expensive to remove the appendix out of a rich abdomen?

    The "moron that started Microsoft" is entitled to his opinion about how his fortune should be spent: he built it and earned it. That doesn't mean it gives him any authority to speak on behalf of anyone else. By the way, did you know he also claims the operating software market is competitive? So it must be right, right?
     
  6. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

    It's simple business economics. When you buy parts for your bike, do you buy from the guy who sells it cheapest, or do you check to see if you can pay more but buy from someone who supports local charities?

    California is right now reaping the benefits of taxing and regulating businesses to death. Businesses are simply moving out of state. Massachusetts did the same thing to a lot of manufacturers years ago, they just packed up and headed south where the climate was more friendly.

    You may not like the rich, but they own a lot of the businesses that provide jobs. Try to suck too much out of them and they just take their jobs elsewhere. Fewer jobs doesn't help people much.

    A large percentage of the world's population would regard you in the same light that you regard the rich in this country.
     
  7. ysr612

    ysr612 Well-Known Member

    when I buy my parts I have a 10% rule I buy from someone I like or trust. If they are within 10% (not counting tax) of the cheapest. This is easier with Talbot and Chip around.
     
  8. Tunersricebowl

    Tunersricebowl Fog, onward through.

    I advise/inform all my customers that buying locally in the long run benefits them because while the cut throat outlets can and do beat my prices,they are never around to offer advice,stay late to finish a project,or a dozen other value added services that I perform,for a higher price.
     
  9. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

    Let me use a better example than buying bike parts, you guys get a little incestuous there.

    What were small border towns in NH have become home to vast numbers of stores that attract incredible numbers of shoppers from MA and VT.

    Why?
    NH has no sales tax at all. MA and VT have high sales taxes to help support the never-enough-money social programs they keep voting for.

    The irony? The same people who voted for the programs and sales taxes are the ones crossing the border to avoid paying the taxes. Evidently they see the need for the tax, they just don't want to be the ones to pay it. Meanwhile, businesses in their own state are losing out on millions in sales which also costs jobs.
    Doesn't seem to make much sense, but here in NH we appreciate their stupidity.

    Now if we could just stop the Bay Staters from moving here..........
     
  10. Tunersricebowl

    Tunersricebowl Fog, onward through.

    Never under estimate the greed and stupidity of the average American. These same yahoos can't undertand school taxes.
    Even if you don't have kids in school,the education system,crappy as it is these days,raises the overall quality of life for everyone,in the long run,so everyone should contribute.No one benifits from stupid voters.Witness our present wholly owned corporate stooge president. Tax cuts for the rich do a quick 180 and land right in the RNC's coffers. What a country(we used to have).
    To quote a pundit " At last our long national nightmare of peace and prosperity are finally over".
     
  11. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

  12. Tunersricebowl

    Tunersricebowl Fog, onward through.

    Look up the corporate tax rebates,tax scams,offshore headquarters,and CEO compensation packages,and then lets talk about class warfare.I don't even want to think about Harkin/Enron/Cheney.Check into child poverty rates. I guess those kids should just go get a job!Oops,sorry about your life savings,oh well,now that Mc Donalds burger flippers are manufacturing specialists,they can just work a little harder right?If they have the right stuff,they can all start a small business and prosper! 58 Yrs old? No problem,just work harder! Lost your dwelling? No problem! Work harder!When I talk about reality,you say class warfare.My words won't put you out on the street. A rich guy WILL put a single mom out on her ass if she can't pay up. Warfare? You guys better hope not.

    There are seven sins in the world;

    Wealth without work
    Pleasure without conscience
    Knowledge without character
    Commerce without morality
    Science without humanity
    Worship without sacrifice
    Politics without principle
     
  13. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

    I can still remember when the war on poverty began. Since then we've gone from one-worker families with 4 kids to 2 worker families with 2 kids, taxes have sky-rocketed across the board along with crime-rates and social programs have increased year after year, and yet there are more poor now than when we started.
    And yet, all we hear about is the need for more programs and more tax money to feed them.

    More taxes isn't the answer. Giving the people with the money more incentive to look elsewhere to invest in industry isn't the answer.
     
  14. Shyster d'Oil

    Shyster d'Oil Gerard Frommage

    That is just awesome.:clap: :clap: :beer:

    Now what did Jesus say about a rich man. . . ? Can one of you capital "C" Christians please make the full quote and citation please???
     
  15. 50Joe

    50Joe Registered User

    Dude, you need to post more! :clap:
     
  16. ysr612

    ysr612 Well-Known Member

    Mahatma Gandhi, as we know, walked barefoot, which produced a huge set of calluses on his feet. He ate very little, which made him frail and with his odd diet, he suffered from bad breath. This made him ... what? (Oh, man this is so bad, it's good) A super calloused fragile mystic hexed by halitosis

    ps stolen from cartalk but they stole it first
     
  17. Tunersricebowl

    Tunersricebowl Fog, onward through.

    Dude,I was gonna chew you a new @hole for outing me on that quote,but I laughed so hard I've got coffee coming out my nose!
     
  18. Tunersricebowl

    Tunersricebowl Fog, onward through.

    There are some teriffic sites/blogs out there that say it all. Here's one.http://www.buzzflash.com/premiums/perfectlylegal.html

    One of the best,written by a former bushco crime family foot soldier named Al Martin is called Al Martin Raw. It's no longer free,you must suscribe for I think $6,but if ANY of what this guy says he witnessed is half true,these turds are going down.
    Oh yea,brother Al was an officer in Naval intel. He speaks spook.
    He has ALL the dirt on bushco.
    Don't mean to mix politics with religon,but this thead seems loosy golden goosy,so to speak.
     
  19. fastfreddie

    fastfreddie Midnight Oil Garage

    how do you define rich, wealthy, poor, etc.
    which class is getting reamed?
     
  20. In Your Corner

    In Your Corner Dungeonesque Crab AI Version

    To 3/4 of the world, Tunersricebowl is wealthy. They'd feel the same sense of justice taking him down that he'd feel taking Bush down. Frankly, to me, anyone who can afford to race is wealthy.

    Just curious, Tuner, you feel the same way about Kerryco, or Kennedyco or any of the innumerable "common man" rich guys on the Democrat side? If they have more money, they must be guilty of something.
     

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