If I gotta hear one more person talk about tax cuts for the rich, I think I’m gonna be sick.
A Simple Introduction to Our Tax System
Here is a very simple way to understand our tax system. 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 totals $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, and the tenth man - the richest - would pay $59.
That’s what they decided to do. 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 (in tax language, a tax cut).
“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 $80.00.
The group still wanted to pay their bill the way we pay 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 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 paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. 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. “Hey, out of the $20 savings, I only got a dollar, but he got $7!” declared the sixth man as he pointed to the tenth.
“Yeah, that’s right,” exclaimed the fifth man, “I only saved a dollar, too… It’s unfair that he got seven times more than me!”
“That’s true!” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison who have never paid for anything, “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 he didn’t show up for dinner, so the nine sat down and ate without him. When it came time to pay the bill, they discovered a little late something that was very important. They were fifty-two dollars short of paying the bill!
Imagine that!
And that, boys and girls, journalists and college instructors, is how the 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.
Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straight-forward logic!
Figure it out!
(BTW, I found this on the net ages ago and copied it to a word document I saved. It’s not mine, but I have no clue who wrote it.)
Wow! Now I feel so bad for those billionaires paying out all that money. How will they paint their yachts? Will they have to buy domestic? Will it ever end?
Maybe Gov’t could live within its means and reduce the weight of those bags by reducing waste, fraud, and spending. If any of us common people can’t afford something we don’t print more money and spend spend spend. We reduce spending. Yes, we may use credit cards, but even that dries up at some point of no return.
For all those that complain about tax cuts on the wealthy (those that create private sector jobs for the most part), how do we reduce unemployment now and looking forward? Gov’t jobs not included because taxpayers are paying their salaries.
Librarian – go INTO a library and read the history of taxation in the US. For a while the highest tax rate (tax on $ over 2 milllion) was in the 80-90% range. This would keep the money in the company rather than 10 houses for the CEO. It eventually dropped lower and lower until now the CEOs are ripping off the companies and firing as many people as they can. Clinton and W helped by cutting rates even further. W cut taxes during his (unnecessary) war for the first time in history.
Also, percentage of income is the LEAST regressive way to determine taxation.
Why do “liberals” use the “he must be a secret homosexual” meme? No. 1: It demeans those people of gender-confusion that you purport to respect. No. 2: It’s illogical No.3: It’s name calling.
Librarian, excellent post.
Doesanybody have a response to ScottFrito’s main points? When did our government become a means to redistibute wealth and hand out favors? Was it mainly because it was necessary to involve the populace and government in a closer relationship? Is this arrangement inevitable? You may be able to convince moderates this is the case if you could find serious rebuttals to Scott’s points. Personally, that’s where I’m at. “True” conservatives claim the pre-eminence of free-markets, yet don’t seem to honor this belief. I should vote for the Free-Market people when they fill their pockets (apparently) at the expense of the rest of the populace? I don’t think either party is entirely safe enough to leave to it’s own devices…
we’re supposed to cut the ropes? last time we did, the balloon kept going up, up, up, never down, everyone thought it would keep going up forever, like house values…..
I dare any one of you to look me in the face and tell me if you were rich, you wouldn’t have excessively expensive toys.
And if you were one of the wealthy, and your taxes went up, I’d bet dollars to donuts you’d pay off some sicko in Washington (who are a percentage of the wealthy you’re all griping about. And I have friends in DC, so I know) to lower your taxes so you could keep playing with your pricey toys.
I’d still rather live in a country where I have the potential TO be wealthy than live in a country where to government decides how much I make whether I like it or not.
It’s called capitalism, and it’s what’s been driving this nation for going on 400 years. Ever since John Smith quoted the Bible and said “He who doesn’t work, doesn’t eat.”
You didn’t need tax money for welfare. There was no welfare. There was RESPONSIBILITY.
Winky, if you have read my post, you should have realized that I took the middle position. It is precisely scary people like you that prevents me from accepting Lib-Think to any degree. Since the Libs are attempting to remake this democratic-republic after their own distorted impression of the world…this is even more scary and leads me to vote Republican every time.
So let’s just go back to the good old days of the 50s. Whatever the tax rates were then, let’s just go back. Those were, after all, the golden days of American capitalism.
1Ti 6:10 For the LOVE of MONEY is a root of all kinds of evil, for which some, by longing for it, have strayed from the belief, and pierced themselves through with many pains.
The ” love of money “is your root of all your evil .
WT*allthenames,etc. Nice rebuttal to Librarians post. Now, some one take the other side and fine tune this thing. I can’t, my mind’s numb.
I actually support something like Harley’s Fair Tax…We should start from scratch with known quantity/quantities.
Just think…If we could settle up American citizen’s incomes we might be able to get the illegals to leave and people like Dr.Canuck, and the so-called High-Tech immigrants that Big-money wants to import.
Why do so many people from the right hate our country and our Constitution? It says clearly in the preamble that one of the goals is to “promote the general welfare” of its people. It isn’t to make sure that the rich can stay rich.
Fair tax? Why not a sale3s tax on EVRYTHING, for EVERYBODY? That way, when the millionaire buys a new yacht, he pays the same amount (percentage)_ of sales tax as did the plugger whjo buys a sixteen foot jonboat…Then the money is split between state and fed, state splits with counties, counties with municipalities, etc. If you don’t want to pay tax on say, groceries, plant a garden and raise rabbits and chickens for our proteine…that way you only pay tax on their feed…probably would get more money to run the governme3ntrs that way, and nobody could complain they are being taxed unfairly…maybe we could require a compulsary day a month or something to perform work for supporting the infrastructure…sounds like a plan to me.
Some of these posts are full of insults and some of them make lots of valid points. My opinion is that the tax structure should go back to a point when an average CEO made 20 times what the average worker made and not the rate it is today which I have heard runs between 150 to 300 times.
Well, Winky made a good point : We apparently need MORE taxes, not less. But, every plan for tax reform always ends up with a LARGER tax base due to rescinded tax breaks and shelters…
And yet, I believe the “RICH” will find ways around paying their burden like the Lib hotheads say here; hence, the need for scales and tools to extract taxes from the populace, rich or otherwise.
Harley, I’m talking about the distribution of wealth in a country, what is fair, and what is exploytation of the average worker. CEO’s should not amass their fortune on the backs of labor. That is what is happening today. It is the banking and insurance industries that are doing this today and that is why Wall Street was bailed out and health insurance costs so much.
LibrarianInTraining over 14 years ago
If I gotta hear one more person talk about tax cuts for the rich, I think I’m gonna be sick.
A Simple Introduction to Our Tax System
Here is a very simple way to understand our tax system. 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 totals $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, and the tenth man - the richest - would pay $59.
That’s what they decided to do. 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 (in tax language, a tax cut).
“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 $80.00.
The group still wanted to pay their bill the way we pay 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 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 paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. 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. “Hey, out of the $20 savings, I only got a dollar, but he got $7!” declared the sixth man as he pointed to the tenth.
“Yeah, that’s right,” exclaimed the fifth man, “I only saved a dollar, too… It’s unfair that he got seven times more than me!”
“That’s true!” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison who have never paid for anything, “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 he didn’t show up for dinner, so the nine sat down and ate without him. When it came time to pay the bill, they discovered a little late something that was very important. They were fifty-two dollars short of paying the bill!
Imagine that!
And that, boys and girls, journalists and college instructors, is how the 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.
Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straight-forward logic!
Figure it out!
(BTW, I found this on the net ages ago and copied it to a word document I saved. It’s not mine, but I have no clue who wrote it.)
bradwilliams over 14 years ago
Wow! Now I feel so bad for those billionaires paying out all that money. How will they paint their yachts? Will they have to buy domestic? Will it ever end?
wminfield over 14 years ago
Maybe Gov’t could live within its means and reduce the weight of those bags by reducing waste, fraud, and spending. If any of us common people can’t afford something we don’t print more money and spend spend spend. We reduce spending. Yes, we may use credit cards, but even that dries up at some point of no return.
For all those that complain about tax cuts on the wealthy (those that create private sector jobs for the most part), how do we reduce unemployment now and looking forward? Gov’t jobs not included because taxpayers are paying their salaries.
lalas over 14 years ago
Librarian – go INTO a library and read the history of taxation in the US. For a while the highest tax rate (tax on $ over 2 milllion) was in the 80-90% range. This would keep the money in the company rather than 10 houses for the CEO. It eventually dropped lower and lower until now the CEOs are ripping off the companies and firing as many people as they can. Clinton and W helped by cutting rates even further. W cut taxes during his (unnecessary) war for the first time in history.
Also, percentage of income is the LEAST regressive way to determine taxation.
lalas over 14 years ago
Hey Meganut – check out that discussion about Drs from the previous toon: http://www.gocomics.com/lisabenson/2009/10/06/
Unlike you I have reference materials.
oneoldhat over 14 years ago
dear lib in training your only prob is you exspect people like live in lala land to think
mustbeunique2 over 14 years ago
Recquring taxes is a form of terroism.
NoFearPup over 14 years ago
Why do “liberals” use the “he must be a secret homosexual” meme? No. 1: It demeans those people of gender-confusion that you purport to respect. No. 2: It’s illogical No.3: It’s name calling. Librarian, excellent post. Doesanybody have a response to ScottFrito’s main points? When did our government become a means to redistibute wealth and hand out favors? Was it mainly because it was necessary to involve the populace and government in a closer relationship? Is this arrangement inevitable? You may be able to convince moderates this is the case if you could find serious rebuttals to Scott’s points. Personally, that’s where I’m at. “True” conservatives claim the pre-eminence of free-markets, yet don’t seem to honor this belief. I should vote for the Free-Market people when they fill their pockets (apparently) at the expense of the rest of the populace? I don’t think either party is entirely safe enough to leave to it’s own devices…
treered over 14 years ago
we’re supposed to cut the ropes? last time we did, the balloon kept going up, up, up, never down, everyone thought it would keep going up forever, like house values…..
mustbeunique2 over 14 years ago
Recquiring taxes is organized crime.
LibrarianInTraining over 14 years ago
I dare any one of you to look me in the face and tell me if you were rich, you wouldn’t have excessively expensive toys.
And if you were one of the wealthy, and your taxes went up, I’d bet dollars to donuts you’d pay off some sicko in Washington (who are a percentage of the wealthy you’re all griping about. And I have friends in DC, so I know) to lower your taxes so you could keep playing with your pricey toys.
I’d still rather live in a country where I have the potential TO be wealthy than live in a country where to government decides how much I make whether I like it or not.
It’s called capitalism, and it’s what’s been driving this nation for going on 400 years. Ever since John Smith quoted the Bible and said “He who doesn’t work, doesn’t eat.”
You didn’t need tax money for welfare. There was no welfare. There was RESPONSIBILITY.
NoFearPup over 14 years ago
Winky, if you have read my post, you should have realized that I took the middle position. It is precisely scary people like you that prevents me from accepting Lib-Think to any degree. Since the Libs are attempting to remake this democratic-republic after their own distorted impression of the world…this is even more scary and leads me to vote Republican every time.
cjr53 over 14 years ago
I must agree,
Tax cuts for the rich are bad for the country.
cdward over 14 years ago
So let’s just go back to the good old days of the 50s. Whatever the tax rates were then, let’s just go back. Those were, after all, the golden days of American capitalism.
Ronshua over 14 years ago
1Ti 6:10 For the LOVE of MONEY is a root of all kinds of evil, for which some, by longing for it, have strayed from the belief, and pierced themselves through with many pains.
The ” love of money “is your root of all your evil .
NoFearPup over 14 years ago
WT*allthenames,etc. Nice rebuttal to Librarians post. Now, some one take the other side and fine tune this thing. I can’t, my mind’s numb. I actually support something like Harley’s Fair Tax…We should start from scratch with known quantity/quantities. Just think…If we could settle up American citizen’s incomes we might be able to get the illegals to leave and people like Dr.Canuck, and the so-called High-Tech immigrants that Big-money wants to import.
Vasmosn over 14 years ago
Why do so many people from the right hate our country and our Constitution? It says clearly in the preamble that one of the goals is to “promote the general welfare” of its people. It isn’t to make sure that the rich can stay rich.
cdward over 14 years ago
They used to have it right – in the 50s. Why doesn’t someone from the right go along with that? Didn’t Ike have it right?
woodwork over 14 years ago
Fair tax? Why not a sale3s tax on EVRYTHING, for EVERYBODY? That way, when the millionaire buys a new yacht, he pays the same amount (percentage)_ of sales tax as did the plugger whjo buys a sixteen foot jonboat…Then the money is split between state and fed, state splits with counties, counties with municipalities, etc. If you don’t want to pay tax on say, groceries, plant a garden and raise rabbits and chickens for our proteine…that way you only pay tax on their feed…probably would get more money to run the governme3ntrs that way, and nobody could complain they are being taxed unfairly…maybe we could require a compulsary day a month or something to perform work for supporting the infrastructure…sounds like a plan to me.
oneoldhat over 14 years ago
ReasonsVentriloquist sounds like the people in robes at airports my suggestion for you take an econ course
deadheadzan over 14 years ago
Some of these posts are full of insults and some of them make lots of valid points. My opinion is that the tax structure should go back to a point when an average CEO made 20 times what the average worker made and not the rate it is today which I have heard runs between 150 to 300 times.
charliekane over 14 years ago
I was kinda thinkin’ that when they took them bags off is kinda when the balloon started comin’ down.
If you can follow Reasons post, you’ll understand why.
deadheadzan over 14 years ago
No, Harley, I’m talking about the tax structure in the 1950’s and 1960’s when CEO’s made 20 times that of average worker. That was a FAIR TAX system.
NoFearPup over 14 years ago
Well, Winky made a good point : We apparently need MORE taxes, not less. But, every plan for tax reform always ends up with a LARGER tax base due to rescinded tax breaks and shelters… And yet, I believe the “RICH” will find ways around paying their burden like the Lib hotheads say here; hence, the need for scales and tools to extract taxes from the populace, rich or otherwise.
deadheadzan over 14 years ago
Harley, I’m talking about the distribution of wealth in a country, what is fair, and what is exploytation of the average worker. CEO’s should not amass their fortune on the backs of labor. That is what is happening today. It is the banking and insurance industries that are doing this today and that is why Wall Street was bailed out and health insurance costs so much.