Discussion:An explanation of the tax code

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Jeff-Ohio (talk|edits) said:

4 December 2012
Best explanation of our tax code ever:

Ten men go out for beer. 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. He said, "Since you are all such good customers, 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 $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 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, boys and girls, 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 any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Captcook (talk|edits) said:

4 December 2012
It is a fine illustration of a highly progressive tax system...not so much the tax code.

CathysTaxes (talk|edits) said:

4 December 2012
Jeff, that is a good one and it sure gets one thinking.

CrowJD (talk|edits) said:

4 December 2012
highly progressive tax system

I'm looking forward to us having one again.

As Buffet likes to say, we don't have royalty in America. We pick our sports teams from our best players, not from our playboy rich-daddied playas (though there is some overlap).

I am working on a paper right now entitled "Characteristics of the Dissipated Trust Fund Baby or How Rot has Set into America Since Reagan, and How to Stop It.".

My paper is due to the publisher the first week in January, along with a topical article I was asked to write: "Ohio Through the Eyes of Carl Rove and T. Cruise OR The Adoption of Scientology Techniques by the New Republican Cult, and How to De-program Them While There's Still Time Left".

Spell Czech (talk|edits) said:

5 December 2012
Crow, I would be willing to be interviewed [is there $$ involved?] for your paper about dissipated trust fund babies, but only if you'll spell "Buffet" with *two* t's. [Is it the trust, or the fund, or the babies that are dissipated?]

And what is this "overlap" you've found between sports teams players and playboy rich-daddied playas? I think I musta missed that one. Short on coffee today.

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