Taxes explained so even a Democrat can understand
This is a VERY simple way to understand the tax laws. Read on - it does
make you think.
Let's put tax cuts in terms everyone can understand. 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, and 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 (in tax language a tax cut).
"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 $80.00. 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. What about the other six men- 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. 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, but
he, pointing 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, a little late
what was very important. They were FIFTY-TWO DOLLARS short of paying the
bill!
Imagine that!
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.
Where would that leave the rest? Unfortunately, most taxing authorities
anywhere cannot seem to grasp this rather straight- forward logic!
Think about this on April 15, 2003.