Our Tax System Explained
NCfan
Posts: 945
I thought this was pretty good...
Here's a great explanation of our tax system.
Since it is tax season....
Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for beer 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 one 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!
Here's a great explanation of our tax system.
Since it is tax season....
Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for beer 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 one 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!
Post edited by Unknown User on
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Comments
First, in order to offer these customers the $80 deal, the owner had to switch to a lower quality brew for men 1 through 8 and fire one of the bartenders. So not only are most of them not enjoying the drinks as much, they're getting served less often. Plus, under both the $100 and $80 deals man #10 gets invited to the owner's office every half hour or so for a complimentary bump of coke.
Oh, and men 1 through 4 aren't actually allowed inside the bar, but wait out on the sidewalk. Their drinks consist of the remnants of pitchers left over after they've gone too warm and flat for the other patrons to enjoy. Also, the designated driver is always one of these four men, as the others are far too "valuable" to the night's festivities to ever consider such a demeaning position.
Eventually, the first four men get a little irate, because no one would even be able to get to the bar if it wasn't for them. So they complain, saying "hey, this set up sucks. Either let us in or give us fresh beer." Men five through seven can understand their arguments, and seem at least somewhat receptive to their demands. Men eight and nine don't really care either way. Man ten, who's had quite a few potent, quality brews and is coked to the gills, considers the first four men's demand to be so unreasonable that, in a stimulant and alcohol fueled tyrade, goes out and begins shouting them down for being such ingrates. In fact, he treatens to call the cops if they don't clear out. A fight ensues, the police show up, and men one through four are taken away in custody (man ten knows the chief, after all).
When he goes back into the bar, man ten is questioned by men five through nine as to how they're going to get home. Man ten gets so pissed off that these flakes would ever dare question his motives, he accuses them of collusion with the prior four "criminals." He then exclaims that he can't associate with such dangerous drunks and says he's leaving. "How?" the other men ask. "I'll call a cab," he replies.
"But what about us?" men five through nine ask. "We didn't bring enough to cover a cab ride."
"Not my problem," man ten exclaims. "Y'all shoulda been better prepared." He then motions to the bar owner and says that he's leaving, and these five men he's leaving behind have no money to order any more drinks. He walks out the door, gets in a cab, and goes to the best cosmopolitan bar he can find. Men five through nine are kicked out and, with no way home, are forced to stand on the sidewalk outside the bar hoping, at the very least, they'll get some warm flat pitcher remnants brought out to them. Eventually the bar owner gets sick of looking at them and has them arrested for loitering.
Freedom is Slavery
Ignorance is Strength
person A earns 40k a year and saves $10k, hence have a taxable income of $30k [what they've spent]. Person B lives in a more expensive neighbourhood and has to pay more for the same basic services. They don't manage to save anything. They have a taxable income of $40k.
Despite using the same government services equal amounts person B has paid an extra 33% tax compared to what person A has purely because they live in a different area.
Jimmy T is 14 years old and works part time on the week ends. At the end of the year, he hasn't earnt enough to pay tax under the old sytem. Under the new system, he pays tax but price rises due to the addition of the tax mean that his weekly wage now buys him less.
12 people may make the one decision but that doesn't make it right.
Free Rob Farquharson, wrongfully imprisoned!!
www.factbeforetheory.net
This will explain it far better than I can.
http://www.fairtax.org/site/PageServer
the other foot in the gutter
sweet smell that they adore
I think I'd rather smother
-The Replacements-
True, but that can be offset with monthly rebates offsetting the tax money spent.
Are you suggesting this is how taxes should be levied? If so, the evil rich people that pay the majority of taxes and aren't using the majority of services are getting screwed.
...and Jimmy T; prices went down not up because there's now no longer embedded taxes within the price of the product, plus he received a prebate for necessity items. He didn't pay social security tax, he didn't pay medicare tax, so he's quite likely to be better off now.
Tough shit. They have big friends with guns who will extract that beer money from you. And while they're stealing your money, they'll try to convince you that it is right and fair.
Made me laugh and at the same time made me think. The tax issue is too complicated at this time for me to express an opinion. Although, I do come from a country that has a national sales tax AND a Federal Income Tax. No state income tax though. Basic items are tax exempt and as is in the US the federal tax is prorated, the more you make the higher your percentage. About half of the population does not earn enough to have to pay taxes, and if you're poor, you probably don't pay any sales tax because you're barely making it. Plus there is state medical care, at least.
I've been in the US for over five years now, and I really can't tell the difference which system is better. It seems basically the same because I pay a state/county sales tax anyway here. So I'm not sure if one system is better than the other in a global scale. Factor in how much health costs have sky rocketed since I've been here, and it really gets cloudy.
Hehe...do your friends charge you to hang out with them?
food when they come to eat
alcohol when we go out
transportation if they live far away
...
Hehe...sure. I'll happily pay those "indirect costs" to see my friends. Cool thing is that the farmer, the brewer, and the airline aren't too likely to force me to pay them and then turn around and hand my food, alcohol and transportation to someone else.
I just find it a little funny that you'll construct a system of force wherein men steal from their neighbors and then their neighbors steal from him in retaliation and, when someone questions that system, you say "forget your social life". Just a little silly.
Our social life is full of experiences of theft, violence (physical and moral), and competition. I call tax what you call theft, I'm not saying you are right to do so (I think you are wrong), but let's call it theft, it still is a part of society. The only day you won't get robbed one way or another is the day you won't meet anyone.
Careful, hoss. Our society is full of murder too. Don't go changing its name either. Oh wait, you already did.....
that's the point. you pay tax based on your lifestyle. you wanna blow your wad on bigscreen tv, you pay for it. if you live frugally, you can keep every damn cent to yourself if you want.
http://forums.pearljam.com/showthread.php?t=272825
Murder does exist in a society, and if I were a firm opposant to prison I could easily argue imprisonment, today, is murder. But I don't think so either.
If you want nothing to do with the flaws of a multi-million member society, you always have the choice to leave it.
But since all of this is just a matter of words I'll leave it here. I just want to know : do you think that taxes are a democratic choice your countrymen willingly chose? Are there not, in your country, candidates who propose to get rid of taxes but aren't followed by enough people?
I know you don't.
Imprisonment is not murder. War and capital punishment, however, are.
Taxes are a democratic choice the majority of my countrymen willingly choose, yes.
Of course. Few people in this country want to eliminate taxes.
http://forums.pearljam.com/showthread.php?t=272825
http://www.cato.org/images/image002.gif
But I often read you compare taxes to extorsion. Why give a negative spin on democratic decisions? The principle is after all to suit the majority while hearing out the fringe.
I always like reading all you write, but I still don't know why since I generally understand hardly more than half of it!
holy fucking shit. i knew it was bad, but man...
even the 400 pages in 1913 seems ridiculously excessive!
It is. Do you think lynch mobs weren't murderers, just because a majority decided someone should die?
I'm telling you right now: every penny you get from me, you get because you threaten me with violence. What my "countrymen" think or do not think is irrelevant.
Hehe....slavery was a "democratic decision". Would you not put a "negative spin" on that? The Iraq War was a "democratic decision". Is that cool with you?
If that's the best principle you've got, don't be shocked when your principles get voted away.
I'm sorry I haven't been able to explain it better. I'm working on that.
I have no idea how to reply to that. So I'll just say I'm sorry you feel extorted, I don't mind paying my taxes.
And I don't get any penny from you (well I think)!
I wouldn't replace it. I'd simply ensure that it is preceded by rights to life, liberty and property. I guess that makes me old-fashioned.