How Taxes Work . . . 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. But what about the other six — 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. But 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 who pointed 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. There are lots of good restaurants in Monaco and the Caribbean.
Politics - 12 Answers
Random Answers, Critics, Comments, Opinions :
1 :
SIGH... It's so sad when NeoCons can't come up with anything original, they simply copy and paste their chain emails... http://www.snopes.com/business/taxes/howtaxes.asp
2 :
You just killed modern liberalism with regards to capitalism and taxes.
3 :
People pretend it is but the most cherished time in American history for many cons was probably the 1950s, during which, gasp, the marginal tax rate was 91%. I wonder how our country even functioned with all the rich people gone?
4 :
Exactly.
5 :
I'm taking a year of economics in college when this is all I need to know about taxes!!! Thanks internet for dumbing it down into something even I, a humble public college student can understand.
6 :
you just kicked democrats where it hurts. nice
7 :
I understand, I have been the tenth man in the past. I will not be one of the first nine.
8 :
you didn't mention how much they get paid or why? and I know why you didn't... because it would make the rich guy look REALLY bad... the rich man literally makes thousands, in your example... while paying the poor pennies... and the others only $2-$10 dollars a week... and he's complaining about 3 bucks? and then after they beat up the rich guy... they quit working for him... and he had ZERO income... with no workers... EDIT: in the end, the rich guy could have made MUCH more money, just letting the people keep the few bucks... and much more than the $52 they were short the next time... but instead, he lost thousands...
9 :
Whippledoink Van Zerplunkenfloobensnubble wishes to say, "what the heck." So, that's not how the tax system works. Whoever says so has it mixed up with how to make powdered goose dip...
10 :
I've seen this before, it is a very good example. There HAS to be a rich class, a poor class, and a middle class to make society work. It just depends on how you use it.
11 :
Muy intresting. Ellaborate trabajo de mi amigo.
12 :
black women are having 8 babies and each of those babies is having 8 babies my neighbor tyrone voted 8 times we are taking over and you cant stop us whitey
