blupleous

not exactly a moto story but i kinda think it has good point.

Let's put tax cuts in terms everyone can understand.
>
>
>
> Suppose that every day, ten men go out for beer and 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 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 on 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."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, 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 drinking overseas where the atmosphere is somewhat friendlier.
>
> David R. Kamerschen, Ph.D.
> Professor of Economics
> University of Georgia
>
> For those who understand, no explanation is needed.
> For those who do not understand, no explanation is possible

thetophatflash

I have a degree in economics and actually understand this rather limited view of taxes and benefits, but it has little if any relevance in the real world.

dpenix76

Ive always enjoyed that story.

Randman

You wanna get beat up?? LOL...just kidding man....I have a Ph.D. in Economics and I feel that it is spot on with regards to taxes and benefits in the real world...moral of this story is, drink more beer, makes you forget about how much the government is pissing away your hard earned income, rich or poor.....

blupleous

ohhh! i do love beer. i love this country. i love my superhawk. i love this forum. it just seems like there is so much whining for equality this! equality that! it is just not apparent to the irs. was the 16th ammendment legal? was it ratified properly? not in my opinion. oh and here is another log for the fire. why do tax dollars pay for huge political party parties? they the two big dogs want 100million(taxpayer) for their political shows. that makes me ill. arent political parties private enterprises?

Scooberhawk

The last two lines (of the original post) sum up the whole thing, unfortunately. Nice model though. I've never come across that before.

Randman

YUP....Nail, head!!

firestorm'n

Now I just need to become one of those rich guys.I actually understand how that works now. Thanks

mikstr

While I agree with the underlying premise, something else to consider is that many of the very wealthy have high-dollar accountants who are paid to find every possible loophole in the tax system with the end result being that they pay NO income tax, yet they drive on the same roads as the rest of us,.... That is the other extreme.

Although I am not overly familiar with how the US tax sytem works, I do recall seeing a statistic some years ago that showed that a high percentage of the wealthiest Canadians paid NO income tax. If they don't pay, guess who does? You got it, Mr and Mrs Middle Class.

IN the end, everyone should pay their fair share, no more, no less.

P.S. If you guys think you pay high taxes, come to Quebec, you'll be more than happy to go home and pay your low rates, beleive me!

Scooberhawk

In the US, there is the alternative minimum tax (AMT). This gets paid, regardless of the deductions ordinarily available.

Scooberhawk

This used to be the way things were.. sorta. But soon knowledge of it reached a critical mass, and the laws were changed. There actually are a few deductions available under AMT, but there is always a substantial amount of tax owed after them. Some of those deductions end up being for charitable contributions, for example.

Actually, there is sort of a loophole in that scenario, because too many not-for-profits these days spend so much money on operating expenses (paying the folks that run the show) that a much smaller amount than expected actually goes toward the cause that triggered the contribution in the first place. So a contributor could really be helping to line a friend's pockets, rather than giving it to the government. On the other hand, governments (def. US; don't know too much about Canada, etc.) are notoriously inefficient, so who would want to give their money to Uncle Sam anyway?

I dunno. There's more than two sides to every coin... Or something like that.

beechnut

You are all missing the real moral of the story. Everyone already knows you're going to get hosed on taxes. The part in doubt is whether you'll get hosed on your tab.

If you're drinking with a big group, and you know you're going to split the bill, keep two things in mind.

1) don't order the cheapest drinks

2) offer to be the guy who collects the green and figures out the tip, most of the time you end up with too much money.

Babelfish

That was my idea too. If this was happening where I live the four that didn't pay would be the millionares that pay zero taxes.
Doesn't mean I like the tax system, it's the middle class that pays the bill, not the really rich ones.

penst8grad

Interesting. This thread alone proves the last 2 lines.

mikstr

Really now? What is perhaps more interesting is the blind acceptance of theories, regardless of their source (typically from extreme-left or right wing "think tanks"... there's an ironic name BTW). Having graduated with a four-year B. Comm degree, I can vouch that the theoretical world and real world are, well, worlds apart (need an example, the stock, uh, I mean speculation market). Again, I am not overly famliar with the US tax system but regardless of the jurisdiction, I can state unequivocally that if I have to pay for Mr. Millionaire to drive his Benz/Ferrari... on roads that I paid for (and he did not due to a crafty accountant) then I have some serious issues. Again, while absolute fairness is not an achievable goal in the real world, EVERYONE should make an equitable contribution to the running of our government. Now, flame away......

L8RGYZ

Those with power use it to extract what they can from those with less power.

Trust me... the wealthy are not suffering... and they're certainly not being beaten up.
Reminds me a bit of what the sportscaster said when ND Brady Quinn fell so far in the draft... the essence of it was: don't feel sorry for him; his contract will still be for more money than 99% of the people watching will make in their lifetime.

mikstr

"Those with power use it to extract what they can from those with less power"

yep, Macchiavellian.....

Scooberhawk

The rich get richer and the poor get poorer.. Eh, the rich get richer and the poor seem poorer by comparison.

There more than two sides to every coin. Just because someone is "right," doesn't mean someone with an opposing view is "wrong." I'm not a big fan of this two party system because everything in politics is in either/or terms. If the Dems are right, the Reps are wrong, and vice-versa. It all makes for great propaganda. Even folks trying to stick to the middle end up sounding ingnorant half the time. (Don't know why I said that. Not gonna delete it. Off my high horse.)

Scooberhawk

+1 .. .. And I'm assuming that's why no other comment followed. Most interesting..

mikstr

that's odd, I could have sworn I had posted right after that one....

Scooberhawk

I was referring to comments by him.

superhawk48

I met a few Canadians in Mexico while on vacation. All they said about taxes in Canada was, " we party on July 1 st. Thats the day we stop paying our taxes." Thats crazy. I guess thats what happens when you have free health care.