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Thread: Our Tax System - GDG

  1. #1
    Senior Member Cleo Watson's Avatar
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    Default Our Tax System - GDG

    Tax system (Explained in terms of Beer)

    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 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."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.
    A true friend is someone who reaches for your hand and touches your heart.

  2. #2
    Senior Member Steve Hester's Avatar
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    Default

    That's about as good a representation of our tax system as I've ever seen.
    "A government big enough to give you everything you want, is big enough to take away everything you have." - Thomas Jefferson

  3. #3
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    Why can't poor people pay as much as rich people? Why doesn't the IRS just send everyone the same bill? Why don't hungry people just eat cake?

    Just joking, not trying to give anyone a persecution complex. I enjoyed the post.

  4. #4

    Default

    Im getting sleepy finally and that was a little hard to follow LOL!

    That is a good representation.

    Man its nice being poor LOL JK JK

    businesses in Wa get tripple taxed! Hard for the small business owner to stay in business. Greedy government did this because of Boeing, Microsoft, Starbucks, Apple, and many of the other large businesses that support our economy.
    You even have to pay taxes on materials you buy for business related work that you already paid taxes on at the supplier you bought the stuff from LOL!!!!
    Tell me how messed up that is?!!!
    Cant complain......Wouldnt do me any good to complain anyways

  5. #5
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    Actually, it is flawed, which group of people is it complaining about, The people who make 0 - 10,000 a year that don't pay any taxes, or the people that make 10 - 30,000 and pay 15% on earned income whereas higher income individuals 30,000 to 100,000,000 pay 35%. Unearned income on long term capital gains is lower. Is it complaining about older retirees or disabled people, or maybe small children? Government entitlement programs were eliminated a decade ago. There is still aid to children, food stamps and social security for the old and disabled. Is it complaining about them? All it does is illustrate the point that higher income people pay the majority of the taxes, but it is certainly not like going into a bar and buying beers for everyone. Poorer people have no tax break because all their income is earned. They have no unearned income. There is no getting around paying taxes on earned income. The H&R block guy, can't help the poor person because it is cut and dried.

    Small businesses have advantages over big businesses. Small incorporated businesses don't have to pay out dividends to keep their shareholders happy, and that eliminates double taxation. They can just pay out a salary to owner/operators which is an expense. A small business that isn't incarcerated and is a sole proprietor ship isn't tax disadvantaged. It goes on a tax return as simple as revenue minus expenses.

  6. #6
    Senior Member Matt McKenzie's Avatar
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    That's why The Fair Tax makes so much sense. That's also why our Representatives and Senators don't want anything to do with it. Our current tax structure gives them plenty of power to manipulate voters who don't understand our tax code. Dems can gain votes by promising to "tax the rich and help the less fortunate", while Republicans can gain votes by promising to cut capital gains taxes and by giving tax breaks to large corporations.
    If we adopt The Fair Tax, it takes the power away from our elected representatives and puts it back in our hands. Then we get taxed for what we consume, not what we earn.
    Matt McKenzie

    It takes as long as it takes. Sometimes longer.

    "It is better to own a $50,000 dog and have an old truck and crummy equipment than to own $50,000 worth of new equipment and a crummy dog..." EdA

  7. #7
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    Default TAXES & ENTITLEMENTS

    Cleo,

    Well Said! I'll give a copy to all the socialist politicians in our great state, which means the majority will get a copy.

    DL,

    When you talk about entitlements you sound like the media! Social Security was a dictated program which if it had been properly invested would have no problem covering it's obligations into eternity.

    Government entitlement programs are alive & well, just have new names. How is your US Senators & Representative going to vote on the Farm Bill, where 80% of the money goes to 10% of the recipients. Deere stock is up around 150% because it's evident the Farm Bill is a lock.

    Who's doing anything about the long term problem of funding Public Employee retirements which have terms & conditions far exceeding anything one could expect to receive in the private sector. & when was the last time a public employee was held accountable for a mistake that shouldn't have happened?

    Hookset,

    Fair Tax?? Do you mean a Flat Tax on income as advocated by Steve Forbes? If that's what you are saying, Fine, otherwise you're in a NO FLY ZONE!

    Marvin S
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    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

  8. #8
    Senior Member Uncle Bill's Avatar
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    Could it be you might have missed the 'salient' point DL? You say all this does is make a "point that higher income people pay the majority of the taxes". Far beyond that, it illustrates how much class envy exists around any form of tax cuts or relief. How many are willing to kill the goose that lays the golden eggs. etc. etc.

    I think it's a classic example of how the liberal views taught in this nation have developed such a "something for nothing" crowd, it will take generations to once again get the country on a footing of rugged individualism this nation was founded for and by.

    It's not even arguable the liberal/socialistic governmental programs are self-serving. "Find a way to give to the populace, so they will be beholding to us at election time."

    The most hilarious aspect of all this to me, a basic conservative, is how the liberals can win and still be so angry and negative. Apparently they never win enough, or the rich are never punished enough or, and this is what I suspect is the reason, they'd bitch if they were hung with a new rope. Maybe another Clinton era will put a smile on their faces. It will be interesting to have Move on.org running the nation eh?

    UB
    When the one you love becomes a memory, that memory becomes a treasure.

  9. #9
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    Quote Originally Posted by Uncle Bill
    Could it be you might have missed the 'salient' point DL? You say all this does is make a "point that higher income people pay the majority of the taxes". Far beyond that, it illustrates how much class envy exists around any form of tax cuts or relief. How many are willing to kill the goose that lays the golden eggs. etc. etc.
    UB
    What tax cut or relief are you talking about. In the twenty some years that I have been an adult, taxes on the rich have decreased. Rich people pay less tax as a percentage than a guy making 100,000 in earned income.

    The tax code is what it is. Plus or minus 35% is the highest it goes, and it doesn't take much to get there. Corporations aren't people, they are seperate entities. People get rich is through corporations because that is where the tax breaks are.

    As far as class envy goes in our society, the rich must be developing a persecution complex, or are feeling overly self important and upset when someone who isn't paid to kiss their arse doesn't. If the culture changes so that the rich guy goes out of favor, you just have to wait until they come back in style again. That is just a superficial thing that isn't of any real importance.

  10. #10
    Senior Member Matt McKenzie's Avatar
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    Matt McKenzie

    It takes as long as it takes. Sometimes longer.

    "It is better to own a $50,000 dog and have an old truck and crummy equipment than to own $50,000 worth of new equipment and a crummy dog..." EdA

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