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, ladies and gentlemen, 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 some what friendlier.
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Taxxxes 101
Taxxxes 101
"If America Was A Tree, The Left Would Root For The Termites...Greg Gutfeld."
Taxxxes 101
Well, Snopes predictably corrects the urban myth aspects of the piece.
Looking at the IRS Individual Income Tax Return figures (cell E159) I'd guess it was written in 1993.
What's intrinsically wrong with it is that the tax burden is only partly made up by IRS payments. All the consumer taxes, duty taxes and accomodation taxes even out the burden - I did try to work out that effect a while ago on FG but didn't come to a conclusion. The effect of those additional taxes would be to increase the bar tab and add more to the proportion paid by the lower earners.
Looking at the IRS Individual Income Tax Return figures (cell E159) I'd guess it was written in 1993.
What's intrinsically wrong with it is that the tax burden is only partly made up by IRS payments. All the consumer taxes, duty taxes and accomodation taxes even out the burden - I did try to work out that effect a while ago on FG but didn't come to a conclusion. The effect of those additional taxes would be to increase the bar tab and add more to the proportion paid by the lower earners.
Nullius in verba ... ☎||||||||||| ... To Fate I sue, of other means bereft, the only refuge for the wretched left. ... Hold no regard for unsupported opinion.
When flower power came along I stood for Human Rights, marched around for peace and freedom, had some nooky every night - we took it serious. [Fred Wedlock, "The Folker"]
Who has a spare two minutes to play in this month's FG Trivia game! ... My other OS is Slackware.
When flower power came along I stood for Human Rights, marched around for peace and freedom, had some nooky every night - we took it serious. [Fred Wedlock, "The Folker"]
Who has a spare two minutes to play in this month's FG Trivia game! ... My other OS is Slackware.
Taxxxes 101
spot;712017 wrote: Well, The effect of those additional taxes would be to increase the bar tab and add more to the proportion paid by the lower earners.
NOT!!!!!!!!!!!!
Tax brackets in the USA
For 2007, the Federal tax brackets for a single (unmarried) person are:[1]
10%: from $0 to $7,825
15%: from $7,826 to $31,850
25%: from $31,851 to $77,100
28%: from $77,101 to $160,850
33%: from $160,851 to $349,700
35%: $349,701 and aboveThis applies only to amounts above $8,750 (standard deduction of $5,350 plus the one personal exemption of $3,400) for an individual. For example, a single individual would actually pay 0% on the first $8,750 of income, 10% on the amount of income between $8,751 and $16,575, 15% on the amount of income between $16,576 and $40,600, 25% on the amount of income between $40,601 and $85,850, and so on.
I think it STILL jives!!!!
NOT!!!!!!!!!!!!
Tax brackets in the USA
For 2007, the Federal tax brackets for a single (unmarried) person are:[1]
10%: from $0 to $7,825
15%: from $7,826 to $31,850
25%: from $31,851 to $77,100
28%: from $77,101 to $160,850
33%: from $160,851 to $349,700
35%: $349,701 and aboveThis applies only to amounts above $8,750 (standard deduction of $5,350 plus the one personal exemption of $3,400) for an individual. For example, a single individual would actually pay 0% on the first $8,750 of income, 10% on the amount of income between $8,751 and $16,575, 15% on the amount of income between $16,576 and $40,600, 25% on the amount of income between $40,601 and $85,850, and so on.
I think it STILL jives!!!!
"If America Was A Tree, The Left Would Root For The Termites...Greg Gutfeld."
Taxxxes 101
I do apologize, BTS. I obviously didn't express myself very clearly. I agreed with you entirely as far as the effect of IRS taxes go.
My sole obscure point was that if you add indirect taxes - all the other money confiscated by local, state and federal government which starts out in the hands of the ten guys - to the IRS figure, then the PROPORTION of their gross income which goes in taxes flattens markedly - sufficiently to wreck the story as written at least. I discussed this a while ago from the UK perspective at least.
My sole obscure point was that if you add indirect taxes - all the other money confiscated by local, state and federal government which starts out in the hands of the ten guys - to the IRS figure, then the PROPORTION of their gross income which goes in taxes flattens markedly - sufficiently to wreck the story as written at least. I discussed this a while ago from the UK perspective at least.
Nullius in verba ... ☎||||||||||| ... To Fate I sue, of other means bereft, the only refuge for the wretched left. ... Hold no regard for unsupported opinion.
When flower power came along I stood for Human Rights, marched around for peace and freedom, had some nooky every night - we took it serious. [Fred Wedlock, "The Folker"]
Who has a spare two minutes to play in this month's FG Trivia game! ... My other OS is Slackware.
When flower power came along I stood for Human Rights, marched around for peace and freedom, had some nooky every night - we took it serious. [Fred Wedlock, "The Folker"]
Who has a spare two minutes to play in this month's FG Trivia game! ... My other OS is Slackware.