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stumblinthrulife On April 16, 2008

Deleted



Lake Saint Louis, Missouri
#1New Post! Jun 23, 2007 @ 01:24:05
A great tax analogy to help the fiscally liberal among us to understand the fiscally conservative of us. Author - unknown, if anyone has a citation please provide.


Suppose that every day, ten men go out for dinner.

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 $7;

the eighth $12;

The ninth $18.

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.

"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.

The group still wanted to pay their bill the way we pay our 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.

"I only got a dollar out of the $20," declared the sixth man.

He pointed to the tenth. "But he got $7!"

"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.

"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.

But when it came time to pay the bill, they discovered something important.

They were $52 short!

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.
raditz8526 On July 02, 2009

Deleted



, Minnesota
#2New Post! Jun 23, 2007 @ 04:34:56
Excellent post.
stumblinthrulife On April 16, 2008

Deleted



Lake Saint Louis, Missouri
#3New Post! Jun 23, 2007 @ 12:48:22
No one else going to comment. No one going to point out that it's fair that the rich man subsidize the poor man's lunch despite the fact that he get's the same meal? Anyone got any of those great comments like "kill the rich"?

C'mon, everyone keeps asking for a debate - here it is. Redistribution of wealth or equal taxation for all? Tax breaks for the rich, or for the poor?
treebee On April 13, 2015
Government Hooker

Moderator




London, United Kingdom
#4New Post! Jun 23, 2007 @ 14:08:56
@stumblinthrulife Said
"I only got a dollar out of the $20," declared the sixth man.

He pointed to the tenth. "But he got $7!"

"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.

"We didn't get anything at all.

The system exploits the poor!"


thats where it goes tits up

Its fair that he who pays most tax gets the better rebate, makes perfect sense to me. I think bigger earners should pay more tax than those on low incomes. They are subsidising the whole damn country. Isnt that how capitalism works?
alexkidd On February 07, 2012
Captain Awesome!


Deleted



in a bog, Ireland
#5New Post! Jun 23, 2007 @ 14:33:38
makes sense,
though continuing that metaphor, i don't think its when the rich man gets more money off comparatively that the other men get angry.
this is assuming that they're all getting the same meal,
and that all four of the poor guys are getting meals at all.

and the restaurant being the government, its their responsibility to feed the poor guys, not directly the rich men's responsibility. even if that's where their money comes from.

and then lets say the rich men, especially this one richest man buys the restaurant. or maybe since he's the main person funding it he threatens to go to another restaurant if they don't do what he wants.
and what he wants may not be what the other 9 men want.
and since they all really rely on that resteraunt its unfair, especially since only the rich men have an option to leave.

then this metaphor gets a bit convoluted and doesnt really apply.

but its basic principles are bang on. but its more complicated than that as far as i can see.
raditz8526 On July 02, 2009

Deleted



, Minnesota
#6New Post! Jun 23, 2007 @ 15:36:37
@stumblinthrulife Said
No one else going to comment. No one going to point out that it's fair that the rich man subsidize the poor man's lunch despite the fact that he get's the same meal? Anyone got any of those great comments like "kill the rich"?

C'mon, everyone keeps asking for a debate - here it is. Redistribution of wealth or equal taxation for all? Tax breaks for the rich, or for the poor?


How can the poor get a tax break when they don't pay any taxes?
raditz8526 On July 02, 2009

Deleted



, Minnesota
#7New Post! Jun 23, 2007 @ 15:41:27
@treebee Said
thats where it goes tits up

Its fair that he who pays most tax gets the better rebate, makes perfect sense to me. I think bigger earners should pay more tax than those on low incomes. They are subsidising the whole damn country. Isnt that how capitalism works?


The rich should be paying in more in taxes, but not a higher percentage than the poor.
stumblinthrulife On April 16, 2008

Deleted



Lake Saint Louis, Missouri
#8New Post! Jun 23, 2007 @ 15:55:52
Now this is what I was talking about - a bit of reasoned argument!

@alexkidd Said
makes sense,
though continuing that metaphor, i don't think its when the rich man gets more money off comparatively that the other men get angry.
this is assuming that they're all getting the same meal,
and that all four of the poor guys are getting meals at all.


You see now we're running into the difference between the left and right side of that big ol' puddle. In the US, taxes aren't used in the same way as the UK. The biggest difference being healthcare. Here you get the healthcare you can afford, and are responsible for purchasing it yourself. So yes, the wealthy have better healthcare, but that's not the governments fault.

Pretty much everything here is privatized, so I'm not sure where that 50% of my earnings go to be honest. Yes, that's right I have to give half of what I earn to the government. The armed forces don't defend me any better, the roads aren't any smoother, the police still pull me over if I drive too fast, I don't even use the public transport system, my daughter probably will end up in private school. What exactly is it that I pay that foot thick wad of cash for every year?

Is it any wonder that I comb the tax laws for as many credits and deductions as I can find?

@alexkidd Said
and the restaurant being the government, its their responsibility to feed the poor guys, not directly the rich men's responsibility. even if that's where their money comes from.


But is it? At what point does personal responsibility end, and social/government responsibility begin. As far as I'm concerned it is my responsibility to keep food on my family's table, not GWBs.

And to give that comment some context, I come from an extremely poor working class family. I am not the privileged elite. I dropped out of college because I ran out of cash. I worked frikking hard to get where I am, and yes, it kinda stings when my wages get redistributed.

@alexkidd Said
and then lets say the rich men, especially this one richest man buys the restaurant. or maybe since he's the main person funding it he threatens to go to another restaurant if they don't do what he wants.
and what he wants may not be what the other 9 men want.
and since they all really rely on that resteraunt its unfair, especially since only the rich men have an option to leave.


This is where we come into alignment. Wealth is abused, as is power. Should bringing more money to the table give you a controlling stake? In business, yes. In matters of our society, I find that tough to reconcile. Although every logical ounce of my being says "why should it be different", emotionally it just doesn't feel right. It's people's lives we're talking about, and they shouldn't be manipulated for personal gain.
perspicacious On November 28, 2014




?, United Kingdom
#9New Post! Jun 23, 2007 @ 16:01:25
I hate paying tax myself.

I would prefer a proportionally fair system, where each year everyone pays, for example, 15% of their entire wealth in taxes.
stumblinthrulife On April 16, 2008

Deleted



Lake Saint Louis, Missouri
#10New Post! Jun 23, 2007 @ 16:03:16
@perspicacious Said
I hate paying tax myself.

I would prefer a proportionally fair system, where each year everyone pays, for example, 15% of their entire wealth in taxes.


Unfortunately, if we did that while trying to maintain our current society, the country would collapse. There just isn't enough money to do it, unless we remove all welfare and public services. Government would have to be trimmed (read maimed), and the armed forces would probably end up privatized.
raditz8526 On July 02, 2009

Deleted



, Minnesota
#11New Post! Jun 23, 2007 @ 16:08:22
@perspicacious Said
I hate paying tax myself.

I would prefer a proportionally fair system, where each year everyone pays, for example, 15% of their entire wealth in taxes.


FairTax
Good book

perspicacious On November 28, 2014




?, United Kingdom
#12New Post! Jun 23, 2007 @ 16:09:02
@stumblinthrulife Said
Unfortunately, if we did that while trying to maintain our current society, the country would collapse. There just isn't enough money to do it, unless we remove all welfare and public services. Government would have to be trimmed (read maimed), and the armed forces would probably end up privatized.


Well whatever proportion would be suitable then to maintain society.

The analogy was about the system itself, portions and breaks. If we all paid the same in percentages, of our entire wealth rather than what we earn, the system would be fair to both the rich and poor.
raditz8526 On July 02, 2009

Deleted



, Minnesota
#13New Post! Jun 23, 2007 @ 16:10:50
@perspicacious Said
Well whatever proportion would be suitable then to maintain society.

The analogy was about the system itself, portions and breaks. If we all paid the same in percentages, of our entire wealth rather than what we earn, the system would be fair to both the rich and poor.


If we were to go with the FairTax that would be about 23%. There would be no cuts in any of the current programs.
bigpete On April 20, 2008




Cardiff, United Kingdom
#14New Post! Jun 23, 2007 @ 16:10:51
My stepfather is in the 40% plus bracket.

He started his own buisiness from nothing and came from nothing himself. I know its the same old story and weve all heard it before but its true. but why should it be different for people who got there wealth from their parents? Its not evil to give your children money.

He has done well for himself and is taxed because of it. I think the average tax bracket is 26%. We should all be paying this much regardless of our incomes.
stumblinthrulife On April 16, 2008

Deleted



Lake Saint Louis, Missouri
#15New Post! Jun 23, 2007 @ 16:11:41
@perspicacious Said
Well whatever proportion would be suitable then to maintain society.

The analogy was about the system itself, portions and breaks. If we all paid the same in percentages, of our entire wealth rather than what we earn, the system would be fair to both the rich and poor.


That proportion would so high as to increase the poverty level drastically. If we are to have an income tax system, then the current system is the one that works (or at least, works best).

As Raditz points out though, there are alternatives.
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