sundaynfl Posted February 14, 2007 Share Posted February 14, 2007 Tax thoughts as April 15th approaches Explanation of tax cuts -- Sometimes politicians, journalists and others exclaim; "It's just a tax cut for the rich!" and that is just accepted to be fact, without question. But what does that really mean? Just in case you are not completely clear on this issue, the following might help. Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer, drink the same amount, and 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 on 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 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 two? 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. Quote Link to comment Share on other sites More sharing options...
Yukon Cornelius Posted February 14, 2007 Share Posted February 14, 2007 Tax thoughts as April 15th approaches Explanation of tax cuts -- Sometimes politicians, journalists and others exclaim; "It's just a tax cut for the rich!" and that is just accepted to be fact, without question. But what does that really mean? Just in case you are not completely clear on this issue, the following might help. Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer, drink the same amount, and 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 on 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 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 two? 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. the smart ones went over sees years ago Quote Link to comment Share on other sites More sharing options...
cliaz Posted February 14, 2007 Share Posted February 14, 2007 Interesting. wiegie is this true? Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted February 14, 2007 Share Posted February 14, 2007 terrible analogy, doing your taxes is nothing like going out for beers... Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 14, 2007 Share Posted February 14, 2007 Interesting. wiegie is this true? It must be true, it's on the internet. (Of course, I'm sure many rich people would be greatly offended at the implication that they are unpatriotic and are willing to renounce their US citizenship just to save a buck or two.) Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 14, 2007 Share Posted February 14, 2007 Interesting. wiegie is this true? it's absolutely true (notice how wedgie tries to be cute and not answer). Quote Link to comment Share on other sites More sharing options...
Big John Posted February 14, 2007 Share Posted February 14, 2007 From 2004 Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted February 14, 2007 Share Posted February 14, 2007 So you are saying I should go to dinner with rich guys more often? Quote Link to comment Share on other sites More sharing options...
sundaynfl Posted February 14, 2007 Author Share Posted February 14, 2007 From 2004 Damn u r good!! I didn't find it!! Quote Link to comment Share on other sites More sharing options...
Puddy Posted February 14, 2007 Share Posted February 14, 2007 It must be true, it's on the internet. (Of course, I'm sure many rich people would be greatly offended at the implication that they are unpatriotic and are willing to renounce their US citizenship just to save a buck or two.) I'm impressed with the consistency of your answer three years later. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 14, 2007 Share Posted February 14, 2007 Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. No they won't. Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted February 14, 2007 Share Posted February 14, 2007 Hmm... I'm sure I've responded to this before, but I'm not in that old thread. BJ, can you go any further into the way back machine and find more of these threads? Quote Link to comment Share on other sites More sharing options...
Big John Posted February 14, 2007 Share Posted February 14, 2007 BJ, can you go any further into the way back machine and find more of these threads? Those has been purged out. Quote Link to comment Share on other sites More sharing options...
TheGrunt Posted February 14, 2007 Share Posted February 14, 2007 And that, boys and girls, journalists and college professors, is how our tax system works. This is by far one of the best posts that I've read regarding the tax system in our country. An excellent metaphorical approach so that even the most confused are no longer in the dark. It is this reason explained above that I will never under-appreciate the amount of income that all of the richest legal US citizens pour into our tax system. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 14, 2007 Share Posted February 14, 2007 This is by far one of the best posts that I've read regarding the tax system in our country. An excellent metaphorical approach so that even the most confused are no longer in the dark. It is this reason explained above that I will never under-appreciate the amount of income that all of the richest legal US citizens pour into our tax system. Quote Link to comment Share on other sites More sharing options...
TheGrunt Posted February 14, 2007 Share Posted February 14, 2007 Okay so you caught me. I might have had a little too much in there somewhere. But that still doesn't mean we should increase taxes for the rich (corporate business' and individuals) by an even greater amount. Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 14, 2007 Share Posted February 14, 2007 it's absolutely true (notice how wedgie tries to be cute and not answer). Az, as I said in the thread from 2004, we've already been through this numerous times and it's not worth getting into again. (Although I will mention again that another problem with the analogy is that it makes the assumption that everyone is getting the same drink. That is certainly not the case in the real world.) Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 14, 2007 Share Posted February 14, 2007 It must be true, it's on the internet. (Of course, I'm sure many rich people would be greatly offended at the implication that they are unpatriotic and are willing to renounce their US citizenship just to save a buck or two.) Doesn't work that way. If a primary purpose of renouncing your citizenship is to avoid US tax, you still have to pay US taxes on your world-wide income for 10 years even if you never step foot back on American soil. There are some rules that soften the effect of double-taxation, but it ain't as simple as turning in your American flag lapel pin at the airport duty free shop. Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 15, 2007 Share Posted February 15, 2007 Doesn't work that way. If a primary purpose of renouncing your citizenship is to avoid US tax, you still have to pay US taxes on your world-wide income for 10 years even if you never step foot back on American soil. There are some rules that soften the effect of double-taxation, but it ain't as simple as turning in your American flag lapel pin at the airport duty free shop. So that makes this whole thread even that much more retarded. (how exactly, though, do they make these expats pay?) Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 15, 2007 Share Posted February 15, 2007 (edited) So that makes this whole thread even that much more retarded. (how exactly, though, do they make these expats pay?) Seize assets they have in the US. If they're being paid by US companies, they can garnish wages. Edited February 15, 2007 by yo mama Quote Link to comment Share on other sites More sharing options...
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