Let’s put tax cuts in terms everyone can understan
Last comment by sebekm 2 years, 2 months ago.

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Suppose that every night, ten men go to their favorite bar for beer. The tab for all ten
comes to $100 for ten pitchers. 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.
So, that’s what they decided to do. The ten men drank in the bar every night 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 nightly tab by $20.”

So, now drinks for the ten only cost $80. The group still wanted to pay their tab 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, 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 each end up being ‘PAID‘ to drink 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 paid $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 drunk and outside the bar, 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 me!”

“That’s true!!” shouted the seventh man. “Why should he get $10 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 the tenth man didn’t show up at the bar, so the nine sat down and drank without him. But when it came time to pay the tab, they discovered something important. They didn’t have enough money between all of them for
even half of the tab!


Latest Activity: May 12, 2012 at 3:51 PM


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gacpl commented on Saturday, May 12, 2012 at 15:53 PM

now here's where it starts to get scary.

Facebook co-founder Eduardo Saverin, who made billions off the world’s most popular social network, stands to rake in about $3.84 billion from his 4 percent share of Facebook, Bloomberg reported.
American citizens pay several taxes, including taxes on salary and investments. Saverin would be hit with about $600 million in capital gains taxes whenever he sold the Facebook shares (or "realized the income," in financial speak).
But Saverin may not have to pay -- he's chosen to renounce his U.S. citizenship for residence in Singapore, Bloomberg reported, where there is no capital gains tax.

here's a list of others that have left.

https://www.federalregister.gov/artic...

gacpl commented on Saturday, May 12, 2012 at 16:18 PM

it's already starting.

sebekm commented on Saturday, May 12, 2012 at 17:27 PM

Good story. I only see one potential "flaw":

"....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 nightly tab by $20.”

So, now drinks for the ten only cost $80. The group still wanted to pay their tab THE WAY WE PAY OUR TAXES (emphasis added)."

However - in order to do it "our way," I contend that the first four men would NOT be "unaffected." Our government (a.k.a. "the owner"), would still charge $100, paid exactly as before. But after the money is collected, the owner (a.k.a. "the government") would give $5.00 "back" to each of the "poorest" drinkers (a.k.a. "the freeloaders") - who paid nothing to begin with - thereby reducing the amount retained by the owner from the PAYING DRINKERS (a.k.a. "the stuckees") by $20.00.

This would not be called "wealth redistribution" - it would be called a "refund."

sebekm commented on Saturday, May 12, 2012 at 17:33 PM

....and as for the list of expatriates, copies of it should be printed, rolled up, and alternately shoved down the throats and up the rear ends of our federal elected representatives until the laws are are changed to prevent this type of tax avoidance.

golfnut31316 commented on Saturday, May 12, 2012 at 19:49 PM

Flat tax.

gacpl commented on Sunday, May 13, 2012 at 08:49 AM

sebekm, these people are willing to pay taxes. but the way things are going, with new regulations and constantly added to the cost of doing business they are revolting by leaving the areas that are only look to take more and more of the money they earned. people forget these people pay 40% of all taxes paid. even tho they are less then 1% of the population.

sebekm commented on Sunday, May 13, 2012 at 11:15 AM

gacpl: I basically AGREE with you.

*My first post took aim at the policy which gives tax "refunds" who people who DON'T pay taxes. I don't hear anything about those people (the non-tax-payers/refund receivers) sending their refunds back to the government.

*I haven't forgotten that <1% pay a large proportion of taxes, but many of those (as you pointed out with your expatriates list) are choosing to seek every tax dodge possible to avoid paying ANY taxes. But the problem stems from the way our tax laws are written that makes the United States one of the least business-friendly countries in the world.

sebekm commented on Sunday, May 13, 2012 at 16:18 PM

...and now even the FRENCH are doing it:

http://www.telegraph.co.uk/finance/gl...

gacpl commented on Monday, May 14, 2012 at 16:16 PM

what worries me about the french is that some big employers in France are talking about just shutting down their businesses until they feel safe. one of the largest employers in liberty county is a french owned company.

sebekm commented on Monday, May 14, 2012 at 17:59 PM

But there is some thinking in France that the "campaign talk" by the winner about tax increases might be just that - only talk - and that many of the winner's tax "promises" won't actually happen. We'll have to stay tuned.


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