Interesting take on taxes

[Backtothemac]

Hey I thought this was very, very funny. I found it in the forums at smalldog. It is long, but it is very funny.

OUR PERSONAL TAX SYSTEM AND HOW IT WORKS Author unknown:

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 meager 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 every day 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 day and seemed quite happy with the arrangement until 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. Now dinner for the 10 only costs $80."

The first four are unaffected. They still eat for free. Can you figure out how to divvy up 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 man and the sixth man would end up being paid to eat their meal. The restaurant owner suggested that it would be most fair to reduce each man's bill by roughly the same proportion as they had been paying in the first place, and he proceeded to work out the amounts each should pay. And so now 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 $59.

Outside the restaurant, the men began to compare their savings. "I only got a dollar out the $20," complained the sixth man, pointing to the tenth, "and 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, girls and college instructors and owners of Small Dog, 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. There are lots of good restaurants in Switzerland and the Caribbean.

[Mr. Anderson]

Very simplified and not exactly correct, but interesting none the less. I'll have to pass that along to DutchessStreet and see what she thinks.

D

[mcrain]

Interesting? Yes. Correct? Not exactly.

If the only taxes were federal income taxes, perhaps that story would make sense, as might the all the justification and hard selling the Republican party constantly does to try to convince people (who won't truly benefit) that they should vote and support the Republican tax cuts.

By way of "I told you so" (Although not to you all), when the idea of tax cuts was first being pushed, I was one of the few who said that a tax cut would hurt our economy rather than help it. If you will all recall, Greenspan was, at the time, increasing the interest rates because the economy was running too hot, which risked serious inflation. Well, guess what a tax cut does to inflation and the economy? It's like throwing fuel on a fire. Not real smart, but then again, this is W we're talking about. Now, many overvalued (inflation compounded by corporate "evildoers") stocks are tanking.

Was it just me, or did anyone else notice that all the Republicans who were shouting about the 10th amendment and getting government out of our businesses pretty silent since Enron/Worldcom/AOL/etc...?

[Backtothemac]

mcrain. mcrain, mcrain. You and I both know that the problems with the economy were well grounded during the last 2 to 3 years of the Clinton administration. We also know that the accounting problems were taking place during who's administration? Who took more money from Enron republicans or democrats? As someone who made 28,000 last year, I can tell you that I enjoyed the 600 $ back from Uncle Sam. It allowed us to take a vacation that we otherwise would not have been able to take. We also received a refund of over 2200 dollars last year on our taxes, and no, we did not cheat. Point being, we made 28,000 and got back all tax we had prepaid, the 600$ and another 2200 and some change. Not bad for a middle class family would you say?

The tax cuts is not what has evaporated the surpluss, that is the war on terror that has done that. I wish people would ask Tommy why we have 58 open federal judge positions right now. Why can they not give the administration what it needs to be successful on the war and on the economy.

What makes me sick is that the other day with a 488 point rally, Bore (sorry Gore) comes out and starts bashing the economy. Look at the leaders of the party. Everytime the market starts to turn up, or good ecomonic indicators come out, then what happens. Tommy, Bore, and Dick all start saying how bad the economy is.

Sorry,
Rant over

[mcrain]

Originally posted by Backtothemac
mcrain. mcrain, mcrain. You and I both know that the problems with the economy were well grounded during the last 2 to 3 years of the Clinton administration. Ok, and certainly the fact that the Republican house and senate were busy trying to castrate Clinton and passing laws to get big government out of regulating business instead of doing anything about those problems couldn't have had anything to do with anything, because, why? Clinton was the only problem!?!? We also know that the accounting problems were taking place during who's administration? Who created the laws to allow those accounting problems to occur without any oversight? Who took more money from Enron republicans or democrats? Who put half of Enron's key players into top government jobs and who had secret meetings with Enron officials before the meltdown? As someone who made 28,000 last year, I can tell you that I enjoyed the 600 $ back from Uncle Sam. It allowed us to take a vacation that we otherwise would not have been able to take. We also received a refund of over 2200 dollars last year on our taxes, and no, we did not cheat. Point being, we made 28,000 and got back all tax we had prepaid, the 600$ and another 2200 and some change. Not bad for a middle class family would you say? Again, all you're talking about is federal income taxes. Do you eat? Do you own property? A car? A Tv? Phone? Do you pay state income taxes? Do you smoke? Drink? Ever gamble? Buy lottery tickets? Use your local water service? Sewer? You pay a much larger percentage of your income in taxes on those things than someone who makes $280,000, and a far far far far larger percentage of your income on those things than someone who makes $2,800,000.

The tax cuts is not what has evaporated the surpluss, that is the war on terror that has done that. Actually, I didn't say the tax cut evaporated the surpluss. I said the tax cut contributed to the stock market woes, and because in order to justify a tax cut, they had to say we were going to have all this extra money, they made assumptions based on stock market and economy growth that wasn't going to change. Thus, when the market changed, the estimates couldn't be met. I wish people would ask Tommy why we have 58 open federal judge positions right now. Wow, funny you should mention that, but I seem to recall many, many judges being nominated by Clinton who couldn't get a hearing before congress for appointment. Why? Maybe congress was more worried about impeachment than the federal bench. Maybe? Maybe not. Why can they not give the administration what it needs to be successful on the war and on the economy. What would that be? Half of what W does, and most of what he wants to do, he does in secret. What does he need? He has been given money for the war, but we don't really know what's going on. It's got to be tough fighting a noun. On the economy, I don't trust W any farther than I could throw him. Same goes for Cheney. If the economy is going to come back, it is going to do it on its own.

What makes me sick is that the other day with a 488 point rally, Bore (sorry Gore) comes out and starts bashing the economy. Look at the leaders of the party. Everytime the market starts to turn up, or good ecomonic indicators come out, then what happens. Tommy, Bore, and Dick all start saying how bad the economy is. Ok, the market drops thousands of points, and comes back on one rally (there were some stocks that were undervalued), and you think the economy is good?

Sorry,
Rant over Quite alright. How's the wife and mini-BTTM? All well I hope.

[big]

>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!

ummm if the tenth man did not show up to dinner, then the total bill would have been $71, not $80. Do the math from there

[jefhatfield]

very interesting!

depending on what side of the fence you are on, both arguments are correct

but if i were a gazillionaire, i would have no problem treating everybody to lunch...every time

heck, i could buy the restaurant or chain if i wanted to!!!

bill gates does not need all the money he has so that's why he has given some away and he does not expect joe citizen to give away 23 billion over the next few decades...he can afford it so he gives it away

after its all said and done, gates will still be a multi-billionaire

it's all in the scale..that's why i am a democrat

[mcrain]

Originally posted by jefhatfield
bill gates does not need all the money he has so that's why he has given some away and he does not expect joe citizen to give away 23 billion over the next few decades...he can afford it so he gives it away

He doesn't give his money away because he likes to, but because by giving it away, he gets deductions that allow him to keep more of his money.

[backspinner]

ummm if the tenth man did not show up to dinner, then the total bill would have been $71, not $80. Do the math from there

$72?

[big]

>72?

$80 / 9 = 8.8888888 (cost of each meal)
$80 - 8.888888=$71.11111 (total cost of meals)

so really we are both wrong. <sarcasm>damn Mac cant add</sarcasm>

[backspinner]

$80 / 9 = 8.8888888 (cost of each meal)

The only way I can understand it is $80 / 10 = $8 a meal

[big]

you see, at the last meal, when the tenth man did not show up, there were 9 people. so when Backtothemac posted about the last meal, there being 9 people, and them being $52 short, I was just originally trying to correct him on that price...

does anyone else get it, or do I have to do the full math?

[Taft]

If there were 10 people and one person left, that leaves 9 people to pick up an 80 dollar check.

80 / 9 = 8.88889

Taft

[backspinner]

Sorry, I'm from Europe where we pay for ourself :-)

So I thought the bill for 10 people is $80, that makes $8 a meal. If one does not show up, one meal less is consumed. So you don't have to pay for that than. Never understood your way of tipping, either.

[big]

>taft

ummmm yeah...I mentioned that
Say, can we just erase the last like 12 posts that are competely off topic...

does no one else see that after the tenth man did not eat dinner, the others could not have been left owing the same $52 the tenth man would have paid? because his meal would have been included in that.

sooooo they would have been left owing some $40 something dollers, ecause there were nine of them! (I just don't want to do the math)

[big]

>Never understood your way of tipping, either.

5% if the waitress is good.

More than that if she's cute!

[big]

sorry for the double post, though you can not very well order a beer or just a coffee and leave a nickel on the table as the tip...

having someone bring you a coffee prety much deserves at least a dollar (effectively doubling the cost of your jave, though you have to pay for service)

[zarathustra]

Originally posted by mcrain
Again, all you're talking about is federal income taxes. Do you eat? Do you own property? A car? A Tv? Phone? Do you pay state income taxes? Do you smoke? Drink? Ever gamble? Buy lottery tickets? Use your local water service? Sewer? You pay a much larger percentage of your income in taxes on those things than someone who makes $280,000, and a far far far far larger percentage of your income on those things than someone who makes $2,800,000.

I do believe that the example used was to demonstrate *FEDERAL* spending. All the other taxes you list, are for the benefit of your state - to finance roads, schools, local projects, etc.
:confused:
I love it when Democrats get bent out of shape that there is too much given back to the "rich" and the "poor" are taxed heavier, when it's the Democratic agenda to create social programs and bureaucratic position that cost us so much...

[LethalWolfe]

Wait, wait wait... Why does the cost of the meal have to go down w/o the 10th man eating? What if they go to someplace and share a really big $100 pizza?


Back on topic, the example is an over simplification of the US tax system, but most people show an extreme inablity to grasp the sliding scale tax system we have now so an over simplification is a good place to start IMO. ;)


Lethal

[mcrain]

Originally posted by zarathustra
I do believe that the example used was to demonstrate *FEDERAL* spending. All the other taxes you list, are for the benefit of your state - to finance roads, schools, local projects, etc.
:confused:
I love it when Democrats get bent out of shape that there is too much given back to the "rich" and the "poor" are taxed heavier, when it's the Democratic agenda to create social programs and bureaucratic position that cost us so much...

Of course the example was only about the FEDERAL tax system. That was my point. If you put blinders on, you could look at the tax cut proposed by the Republicans and almost think it was really fair, however, if you take the blinders off, and look at taxation as a whole, the tax cut ends up creating a slightly regressive tax system. In other words, a system where the lower income levels pay a higher share of their overall income in taxes than the higher income brackets.

As for your comment about the Dems spending money, sorry, but you're an idiot. Both sides spend lots and lots of money. Every dollar ever spent on social programs ever proposed in the history of mankind by the democrats is equaled or exceeded by dollars spent by the Republicans.

If the Dems "agenda" is to spend money, what's the republican agenda? Let the Enrons of the world rape and pillage the rest of us for a profit? Spend every penny on the military? Let the poor starve? Let the roads fall apart? Let the old people die, they're going to anyway?

I'm not that naive, I sure as heck hope you aren't.

[big]

>Why does the cost of the meal have to go down w/o the 10th man eating?

you are correct, the final meal never did stipulate that they ate at the same restaurant, though I think your just being difficult! :)

>All the other taxes you list, are for the benefit of your state - to finance roads, schools, local projects, etc.

If we could build our towns and communities correctly, there would be far less taxes. using just some of the ideals in New Urbanism, a walkable community is very important. you wouldn't have to drive to buy milk one satuday afternoon (waisting gas money, on huge roads)

that builds up! you'd save a lot of taxes on less roads and gas!

[Taft]

Originally posted by mcrain


Of course the example was only about the FEDERAL tax system. That was my point. If you put blinders on, you could look at the tax cut proposed by the Republicans and almost think it was really fair, however, if you take the blinders off, and look at taxation as a whole, the tax cut ends up creating a slightly regressive tax system. In other words, a system where the lower income levels pay a higher share of their overall income in taxes than the higher income brackets.

As for your comment about the Dems spending money, sorry, but you're an idiot. Both sides spend lots and lots of money. Every dollar ever spent on social programs ever proposed in the history of mankind by the democrats is equaled or exceeded by dollars spent by the Republicans.

If the Dems "agenda" is to spend money, what's the republican agenda? Let the Enrons of the world rape and pillage the rest of us for a profit? Spend every penny on the military? Let the poor starve? Let the roads fall apart? Let the old people die, they're going to anyway?

I'm not that naive, I sure as heck hope you aren't.

Great post!!

Both sides spend tons of money on bullshyat. The difference is what kind of bullshyat they spend it on.

I've often found it remarkable how people who should least like the conservatives' financial policies vote for them anyway. The people at the bottom of the financial ladder should be doing everything in their power to prevent conservatives from being elected out of their own interests. And yet they don't.

Its because often people will vote for a candidate based on the issues that aren't going to affect their lives at all. People will vote based on their stance on same-sex marriages, abortions, the religion of the candidate, etc., etc. Really, the things that will effect the majority of the people the most will be a candidates economic and social aide stances.

Maybe the candidates are just able to spin their economic policies so that poor-Joe-voter thinks they won't matter.

In any case, I will never understand how a person living under middle class would vote for a big-business/feed-the-rich type of candidate.

Taft

[mcrain]

The most amazing thing I have seen is not the way in which the Republicans made Bill Clinton into the personification of no morals, but rather the way in which middle and southern America, especially the Bible belt, threw aside any affiliation to candidates who promised farm assistance, welfare, food aid, etc... for a candidate who was against Clinton. Many people vote Republican because they didn't like Clinton's morals. The right to lifers were also attracted to candidates who campaigned that someone else's morals were wrong rather than the candidate who "promised" things that would have been of greater assistance.

I have my personal preferences and opinions on the priorities of spending, and what things are more important than others, however, I know that the beauty of the American System is that there are people out there who believe the exact opposite. For every zealot, there's an opposite zealot. For every moderate, there's a moderate on the other side. This prevents any sort of major shifts in policy or procedure.

[Taft]

Originally posted by mcrain

I have my personal preferences and opinions on the priorities of spending, and what things are more important than others, however, I know that the beauty of the American System is that there are people out there who believe the exact opposite. For every zealot, there's an opposite zealot. For every moderate, there's a moderate on the other side. This prevents any sort of major shifts in policy or procedure.

But what if something so shaking occurs which effects people so violently, that they stop thinking and just start acting. Its these type of situations where the zealots and moderates on one side dissappear and the other side reigns free.

I think we saw a small bit of this in the wake of Sept 11. When a lot people are scared its hard to predict what they will do. Its this kind of situation that scares me the most.

Taft

[zarathustra]

Originally posted by mcrain

As for your comment about the Dems spending money, sorry, but you're an idiot. Both sides spend lots and lots of money. Every dollar ever spent on social programs ever proposed in the history of mankind by the democrats is equaled or exceeded by dollars spent by the Republicans.

If the Dems "agenda" is to spend money, what's the republican agenda? Let the Enrons of the world rape and pillage the rest of us for a profit? Spend every penny on the military? Let the poor starve? Let the roads fall apart? Let the old people die, they're going to anyway?

I'm not that naive, I sure as heck hope you aren't.

I am sorry to see you have no class - there is no need for you to throw your names around - I am not any more an idiot than you are for believing in something. Please reserve your insults and do not let them out. How do you expect "the other side" to take you seriously if you go into a foam-in-the-mouth republican bashing. I would take your points and consider them, but instead I get the feeling you have no desire to listen to me. You make up things (Every dollar ever spent on social programs ever proposed in the history of mankind by the democrats is equaled or exceeded by dollars spent by the Republicans) - unless you have proof for this.

You make it sound like republicans don't give a rodents behind for anything. Because of people like you I consider myself more a republican than a democrat, because attitudes like yours make me sick in the stomach. As a rule, I want less government. And in ideal society I would not want a military. And in an ideal society I would love to get rid of fossil fuels and replace them with hydrogen cells. As an ideal society I would sit in a mountain cabin and munch on granola bars while I sing Kumbaya. In an ideal society.. well I could go on.

This is not an ideal society and we have to balance all aspects of our lives. You are no more right than I am - I hope you can agree that Democrats are leaning towards socialism and republicans embrace capitalism. (I have not mentioned third parties for simplicity's sake) But remember they both believe in the constitution and democracy.

When corruption gets in the picture, it does not matter which party they belong to. So in essence you equated republicans with corrupt polititians - there is just as many on the Democratic side.

All I said in my last post is that since Democrats emphasize social programs , there is a bill to be paid. Granted the republican party spends quite a bit on home defense and the military. When there is a need for subsidized this and that, it will have to come out of someone's pocket.

In Europe there is "free" medical service, higher education, 5 weeks vacation and so on in practically every country. There is also 50-60% income tax and 23% sales tax. We could get into a discussion about the quality of life based on these figures, but it's a preference of likes.

I have experienced communism and socialism, and there is still plenty of corruption to make people mad.

Rant over.

[AlphaTech]

Originally posted by big
>Never understood your way of tipping, either.

5% if the waitress is good.

More than that if she's cute!

Only 5%??? You cheap pr*ck... :p 15% is the standard tipping amount (if the waitress/waiter is decent) with more being not uncommon (except to all you cheap bastards).

BTW, if she is cute, and does more then just sling the food on the table, I usually tip at least 20% (all depending on how much the tab is). The more consists of having a pleasant manner, friendly attitude and doesn't ignore you (especially when you need a refill). Consider this, a meal comes to $20, you [cheap bastage] tip her $1. :rolleyes: Waitresses/waiters get paid much less then the minimum wage (half of the normal minimum wage, if they are lucky) which means they make their money off of tips. Same with food delivery people...

[jefhatfield]

Originally posted by zarathustra


As a rule, I want less government. And in ideal society I would not want a military. And in an ideal society I would love to get rid of fossil fuels and replace them with hydrogen cells. As an ideal society I would sit in a mountain cabin and munch on granola bars while I sing Kumbaya. In an ideal society.. well I could go on.

This is not an ideal society and we have to balance all aspects of our lives. You are no more right than I am - I hope you can agree that Democrats are leaning towards socialism and republicans embrace capitalism. (I have not mentioned third parties for simplicity's sake) But remember they both believe in the constitution and democracy.


Rant over.

suddenly, the lack of the ideal society makes the republicans a big government party, too

i would think that the libertarians are more like an anti-big government party...and anti-intrusion into one's life, too

btw, i am not a libertarian but when i hear anybody say that the gop is about small government, come work for the defense department or the cia...i did and well, you know...let's just say that a lot of money was spent;)

[LethalWolfe]

Originally posted by AlphaTech

BTW, if she is cute, and does more then just sling the food on the table, I usually tip at least 20% (all depending on how much the tab is). The more consists of having a pleasant manner, friendly attitude and doesn't ignore you (especially when you need a refill).


How often my glass is left empty is my typical tipping gauge. If I'm throwin' down a spicey Cajun chicken sandwich at Chili's and sweat is rollin' down my face 'cause my glass of Dr Pepper has been sittin' empty for 5 minutes someone isn't gettin' a great tip. But if my glass barely get's 3/4 empty before I get a refill then someone is gonna get a fat tip that night.


Lethal

[Backtothemac]

Originally posted by mcrain
The most amazing thing I have seen is not the way in which the Republicans made Bill Clinton into the personification of no morals, but rather the way in which middle and southern America, especially the Bible belt, threw aside any affiliation to candidates who promised farm assistance, welfare, food aid, etc... for a candidate who was against Clinton.

On the post that you made before this one about the subject being federal. Exactly. You are dead right. We do have to pay property tax, state income tax, sales tax, death tax, federal tax, capital gains tax, you see the point. The feds, they should cut federal tax, and federal programs. Ones like the one that was approved yesterday by the house that grants 6,500$ to a thinktank at some University to count roadkill. ******** ROADKILL. That is the problem with the budget, and government. I think they are all crooked as *****, and when they are not kissing babies they are stealing their lollypops. (from Hunt for Red October). But the fact is that we have to align ourselves with the ones that we think try to do the most good, based on what we think is good. People align with dems because they are pro choice. People align with repubs because they are pro life, etc, etc. There is not real right for everyone, but yet a meeting of policy that will allow you to accept a person in the position. That is all.

Oh, and as for the south. Alabama has not voted for a democratic candidate for president since the early 1800's. Old south democrats are really republicans. That is why Richard Shelby switched. He was practically a republican when he was a democrat.

[jefhatfield]

Originally posted by Backtothemac



Oh, and as for the south. Alabama has not voted for a democratic candidate for president since the early 1800's. Old south democrats are really republicans. That is why Richard Shelby switched. He was practically a republican when he was a democrat.

this was what one poly sci student called a dixiecrat...old school democrat who liked neither the pro business, east coast, republican industrialists but didn't have a lot in common with the ultra liberal, new dems like johnson, carter, and clinton

the stigma of the republicans being carpetbaggers and northern and midwestern industrialists has died off and many of the original dixiecrats vote republican

many of the gop has used family values and religion to try and grab votes from the bible belt while they actually shovel the money back to the eastern yacht clubs of the northern industrialists

having chosen christianity as my religion and having seen what the bible says vs. the religious right, i know the difference

i don't blame the gop for trying to get the religious vote anymore than i blame the dems for trying to say they are pro labor and having a cushy relationship with the fortune 500 as much as any gop, yacht club loving, eastern industrialist republican

there is a lot of common ground in politics and the weight shifts back and forth

in the 1800s, the liberals were the republicans and they got the minority vote in america until the last couple of generations

in some subtle ways, it is shifting again, with blue collar workers voting more and more gop and the yuppies going with the dems, despite their large incomes

politics is truly strange