Friday, February 09, 2007

I don't know if this is from who it say's it is but I must say I think it's pretty accurate and a real masterpiece.

Enjoy.

AN EXPLANATION OF TAX CUTS.........................
Sometimes politicians, journalists and others exclaim; "It's just a tax
cut for the rich!" and it is just accepted to be fact, without
questioning it. But what does that really mean? Just in case you are
not completely clear on this issue, the following might help.
------------------------------------------------------------------------
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 first four men (the poorest) would still pay nothing.
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, PhD
Professor of Economics
University of Georgia

2 comments:

mommy zabs said...

good stuff.
I'm in favor of flat tax! do you realize if everyone paid 10% that we wouldn't barely need the IRS??? and that 25% of our our tax money goes to funding them? Sounds like a savings worth doing! What does government make everything so annoyingly complicated, inefficient and costly?

Anonymous said...

http://www.truthorfiction.com/rumors/t/taxcuts.htm

Whether or not the info is accurately portrayed, I always like to look at the source, and he didn't write it.

I always do a quick google search on emails I get forwarded, and less than 1 in 10 is factual or attributed to a real person...