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Taxes explained

Old 04-16-2007, 12:48 PM
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Default Taxes explained

I got this in an e-mail - enjoy.

Subject: Taxes

Subject: Taxes explained


Because it is tax season. . . 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. "Because 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.
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Old 04-16-2007, 12:56 PM
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Default Re: Taxes explained

Give that man a beer.
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Old 04-16-2007, 01:40 PM
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Default Re: Taxes explained

yeah...put his on my tab...
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Old 04-16-2007, 01:41 PM
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Default RE: Taxes explained

Wait a minute, the math here isn't adding up accordantly to what is written!

RI Builder - 4/16/2007 12:48 AM

"Drinks for the ten now cost just $80.............. They didn't have enough money
between all of them for even half of the bill!
Isn't 10 / 80 = $8.00 each?
Well 9 x $8.00 = $72.00


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).
Because the four men should have 3 + 7 + 12 + 18 = $40.00 between them and there bill should have come to $72.00 they would have more then half of the bill, not less then half of the bill!
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Old 04-16-2007, 01:50 PM
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Default RE: Taxes explained

I wish it was funny and not true.
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Old 04-16-2007, 01:51 PM
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Default Re: Taxes explained

Garett:

They would have $30.00 based on their new allocation - 2+5+9+14.

Yes, 80/10 is 8.00 each, but remember, they were not paying equal shares - they were paying like we pay our taxes.
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Old 04-16-2007, 01:51 PM
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I wish it was funny and not true.
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Old 04-16-2007, 02:03 PM
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Default Re: Taxes explained

Dave,

True, but why would they assume the tenth person wasn't going to show up? Therefore I would figure the nine would have the money in their pockets as if ten people were splitting the bill - therefore they should have $40.00 in their collective pockets.
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Old 04-16-2007, 02:07 PM
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Default Re: Taxes explained

Garett:

Read it again, they were assuming the 10th person would show up. The tenth person picked up the remaining $50 (with rounding). Without him, (the wealthiest), they collectively had less than half the bill.
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Old 04-16-2007, 07:19 PM
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Garett - 4/16/2007 2:03 PM

Dave,

True, but why would they assume the tenth person wasn't going to show up? Therefore I would figure the nine would have the money in their pockets as if ten people were splitting the bill - therefore they should have $40.00 in their collective pockets.
That is the point Garrett....the other 9 guys automatically assume the 10th guy will always be there, even after they vilify and kick his ass some more. What happens is the 10th guy finally says "I am getting screwed by this tradition. I am going to pick up my marbles and play somewhere that is remotely fair" ..... it is only then that the other 9 guys realize how important the 10th guy was and how losing him screws them.

Our dam tax code penalizes success....there are no if's, and's or but's about it. We should have a tax system that rewards success........remember, a rising tide (successful companies) lifts all boats (citizens).
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Old 04-16-2007, 08:26 PM
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Default RE: Taxes explained

Garret,

I love ya man; but you need to read the last line of Builders post.


Now, where is that foreign beer..........................


Big Al
IRS - Institutionalized Reduction Service
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Old 04-16-2007, 09:08 PM
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Where's the Guinness?

BRILLIANT!
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Old 04-17-2007, 09:07 AM
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Tireless - 4/16/2007 7:19 PM
Our dam tax code penalizes success....there are no if's, and's or but's about it. We should have a tax system that rewards success........remember, a rising tide (successful companies) lifts all boats (citizens).

"A fine is a tax for doing bad;

a tax is a fine for doing good."
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Old 04-17-2007, 09:16 AM
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I NEED a beer now.............just finished my taxes.
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Old 04-17-2007, 11:00 AM
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Snapper Head - 4/16/2007 8:26 AM

Garret,

I love ya man; but you need to read the last line of Builders post.


Now, where is that foreign beer..........................
oh how true that last line is......the worst part about it all is, I still don't see it.

But at least I can do this part right.

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Old 04-19-2007, 08:37 PM
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I hope you all took the telephone rebate.
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Old 04-20-2007, 07:13 AM
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Tax code is pure highway robbery. One of my sons worked around 60 hours a week all year and flew overseas many times away from his family and got a nice bonus......the tax man took almost half of it as he did when same son sold his business. all of which I am sure has happened to many on this board.The post is right on the money, no pun intended. As I have said before around these here parts, the Sons of Liberty threw a helluva lot of tea in the harbor over a dammm sight less.

It is time for a politician with the cajones to step up and call it like it is and vow to put a stop to it or lead a new American Revolution.
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Old 04-20-2007, 08:32 AM
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capndick - 4/20/2007 7:13 AM
.

It is time for a politician with the cajones to step up and call it like it is and vow to put a stop to it or lead a new American Revolution.
But here is the problem.......approx half of the country isn't paying federal income taxes....which side do you think they will be fighting on?

FWIW - the politician's that foster the class warfare should think long and hard about the monsters they create - the SOB at VT was apparently obsessed with class envy.
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Old 04-20-2007, 01:36 PM
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oen word "fair tax"
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Old 04-20-2007, 01:38 PM
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and learn how to spell
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