Posted: Wed 28/Sep/05 1:24pm Post subject: How Tax Works
a silly email I just got sent wrote:
Another view of things in wake of this election..... the capitalist in all of us.
You've heard the cry from across Australiain the last couple of weeks: "It's just a tax cut for the rich!" - and then it's accepted as fact. But what does that statement really mean? The following explanation may help.
Suppose that every night, ten men go out for dinner at La Porchetta's. The bill for all ten comes to $100. They decide to pay their bill the way we pay our taxes, and it goes like this:
The first four men (the poorest) paid nothing
The fifth paid $1
The sixth $3
The seventh $7
The eighth $12
The ninth $18
The tenth man (the richest) paid $59
All 10 are quite happy with the arrangement, until one day, the owner
says: "Since you are all such good customers, I'm going to reduce the
cost of your daily meal by $20."
So now their dinner for ten only costs $80. The group still decides
to pay their bill the way we pay our taxes. The first four men are
unaffected. They will still eat for free.
But how should the other six, the paying customers, divvy up the $20
windfall so that everyone would get his "fair share"?
They realise that $20 divided by six is $3.33. But if they subtract
that from everybody's share, then the fifth and sixth men would each
end up being paid to eat. The restaurateur suggests reducing each
man's bill by roughly the same percentage, thus:
The fifth man pays nothing (like the first four) instead of $1
(100%saving)
The sixth pays $2 instead of $3 (33% saving)
The seventh pays $5 instead of $7 (28% saving)
The eighth pays $9 instead of $12 (25% saving)
The ninth pays $14 instead of $18 (22% saving)
The tenth pays $49 instead of $59 (16% saving)
Each of the six are better off, and the first four continue to eat
for free, as now does the fifth - but 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!"
" That's right," exclaimed the fifth man. "I only saved a dollar too.
It's unfair that he got ten times more than me!"
" 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 then surrounded the tenth and beat him up.
The next night the tenth man didn't show up for dinner. The nine sat
down and ate without him, but when they came to pay the bill, they
discovered that they didn't have enough money between all of them to
meet even half of the bill!
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 at the table anymore.
There are lots of good restaurants in Monaco and the Caribbean.
Joined: Jul 27, 2005 Posts: 1,395 Location: P city
Posted: Wed 28/Sep/05 2:06pm Post subject:
anythingevil wrote:
tax is gay
Dude trust me you want to pay tax! I lived in a country with no tax at all for about 4 years. We had to pay for all of our own medical bills there were no benifits for those who are to sick to work ete. People were actualy living in carbord boxes on the side of the street begging for munny just to stay alive a few metters down a man with a bmw with all the money in the world to spend... Lucky for some but trust me dont moan about paying 12 % as you never know next week you could break a leg riding and be dependant on the tax payers money.
Joined: Feb 06, 2002 Posts: 28,784 Location: doing skiddds
Posted: Wed 28/Sep/05 2:44pm Post subject:
Thats a very simplified argument that, among other things, assumes that money is distributed 'evenly', whereas in reality the 20% of us controlling 80% of the money applies.
That means there's a lot more poor folk than there are rich folk, and although one poor person pays less tax than one rich Christchurch kcocsucker IT professional who recently sold his BMW and bought a Santa Cruz (I'm making this a general, nameless person because it could apply to so many people), 10 poor people pay the same amount (or more) tax as the rich Christchurch kcocsucker IT professional who recently sold his BMW and bought a Santa Cruz, and there are 10 such people to every rich Christchurch kcocsucker IT professional who recently sold his BMW and bought a Santa Cruz V10 and each one of his friends.
Also, why is Richy going out to dinner with the poor kcufers anyway? Shouldn't richy be out at dinner on his own while the poor kcufers mow his lawn and sleep with his wife?
Joined: Feb 06, 2002 Posts: 28,784 Location: doing skiddds
Posted: Wed 28/Sep/05 2:50pm Post subject:
jeremyb wrote:
Jealous per chance? I didn't sell the bmw, I kept it
Time to go urinate on the poor while they shine my shoes for less than minimum wage
For a 21 year old I'm earning plenty - enough to benefit by a couple of thousands of dollars from Don Brashs' tax cuts - but I'm also not an elohssa and care about the country I live in
Joined: Jan 12, 2003 Posts: 32,882 Location: Derailled
Posted: Wed 28/Sep/05 2:52pm Post subject:
happybaboon wrote:
For a 21 year old I'm earning plenty - enough to benefit by a couple of thousands of dollars from Don Brashs' tax cuts - but I'm also not an elohssa and care about the country I live in
I guess your sainthood is in the mail, maybe you should mail order a clue while you're at it...
Joined: Feb 06, 2002 Posts: 28,784 Location: doing skiddds
Posted: Wed 28/Sep/05 2:55pm Post subject:
jeremyb wrote:
happybaboon wrote:
For a 21 year old I'm earning plenty - enough to benefit by a couple of thousands of dollars from Don Brashs' tax cuts - but I'm also not an elohssa and care about the country I live in
I guess your sainthood is in the mail, maybe you should mail order a clue while you're at it...
Yeah. You're right. kcuf the darkies, immigants, omohs, oldies, school children, university students and sick people - what did they ever do for us anyway?
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