Wanted to post this here with the hope that some of these people with their eyes still closed..might get it!
OUR PERSONAL INCOME TAX SYSTEM AND HOW IT WORKS
Best explanation yet...
I was having lunch with one of my favorite clients last week and the
conversation turned to the government's recent round of tax cuts.
"I'm opposed to those tax cuts" the retired college instructor
declared,"because they benefit the rich." "The rich get much more money
back than ordinary taxpayers like you and me and that's not fair".
"But the rich pay more in the first place" I argued, "so it stands
to reason that they'd get more money back." I could tell that my friend was
unimpressed by this argument. Even college instructors are a prisoner of
the myth that the "rich" somehow get a free ride in America. Nothing could
be further from the truth.
Let's put tax cuts in terms everyone can understand. Suppose that
everyday 10 men go to a restaurant for dinner. The bill for all ten
comes to$100. If it was paid the way we pay our taxes, the first four men
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.
The 10 men ate dinner in the restaurant every evening and seemed
quite happywith the arrangement until the owner threw them a curve. Since
youare all such good customers, he said, I'm going to reduce the cost
of your daily meal by $20. Now dinner for the 10 only costs $80.
The first four are unaffected. They still eat for free. Can you
figure out how to divide the $20 savings among the remaining six so that
everyone gets his fair share? The men realize that $20 divided by 6
is $3.33, but if they subtract that from everybody's share, then the
fifth and sixth men would end up being paid to eat their meal!
The restaurant owner suggested that it would be fair to reduce each
man's bill based upon the amount of money they already paid to eat
dinner each night. So he proceeded to work out the amounts each
should now pay. So now the fifth man now pays nothing, the sixth
pitches in $2, the seventh $5, the eighth $9, the ninth $12, leaving
the tenth man with a bill of $52 instead of $59.
Outside the restaurant, the men began to compare their savings. "I
only got a dollar out of the $20" complained the sixth man, and pointing
to the tenth man said, "and he got $7!" "Yeah, that's right" exclaimed
the fifth man, "I only saved a dollar, too. It's unfair that he got
back 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 the richest man 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, girls and college instructors, is how America's 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 any more.
After all, there are lots of good restaurants in Switzerland and the
Caribbean! |
