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Economics 101: tax base explained.
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Oct 25, 2017 07:23:44   #
popparod Loc: Somewhere else.
 
Read this the other day and it makes sense and bears repeating.


Think about it the next time someone complains that the rich people get the lion's share of a tax cut.

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!



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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible

Reply
Oct 25, 2017 07:26:39   #
Loki Loc: Georgia
 
popparod wrote:
Read this the other day and it makes sense and bears repeating.


Think about it the next time someone complains that the rich people get the lion's share of a tax cut.

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!



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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
Read this the other day and it makes sense and bea... (show quote)


Now you went and made sense. You realize that will make Liberals angry?

Reply
Oct 25, 2017 07:29:10   #
popparod Loc: Somewhere else.
 
Loki wrote:
Now you went and made sense. You realize that will make Liberals angry?


Probably Loki, but the ones who get angry will more than likely be the free beer drinkers.

Reply
 
 
Oct 25, 2017 07:42:21   #
Gatsby
 
And what if that 10th man owned the company that the rest worked for,

and he takes the jobs of the other nine overseas with him?

popparod wrote:
Read this the other day and it makes sense and bears repeating.


Think about it the next time someone complains that the rich people get the lion's share of a tax cut.

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!



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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
Read this the other day and it makes sense and bea... (show quote)

Reply
Oct 25, 2017 08:29:07   #
PeterS
 
Gatsby wrote:
And what if that 10th man owned the company that the rest worked for,

and he takes the jobs of the other nine overseas with him?


Such is the glory of free trade....

Reply
Oct 25, 2017 08:36:56   #
PeterS
 
popparod wrote:
Read this the other day and it makes sense and bears repeating.


Think about it the next time someone complains that the rich people get the lion's share of a tax cut.

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!


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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
Read this the other day and it makes sense and bea... (show quote)


So if everyone was envious of what others were charged why didn't the beat up the four freeloaders to start with? And what was the purpose of the $20 cut to begin with? In economics one reduces prices to stimulate new business--only the government give back money for no reason--if this is a class in economic then how are new paying customers generated?

Reply
Oct 25, 2017 09:36:29   #
Ve'hoe
 
Yep.... socialism,,,, spread the misery evenly,,,, punish the masses and pit everyone against each other.......


Like the man said,,, no explanation is possible


PeterS wrote:
So if everyone was envious of what others were charged why didn't the beat up the four freeloaders to start with? And what was the purpose of the $20 cut to begin with? In economics one reduces prices to stimulate new business--only the government give back money for no reason--if this is a class in economic then how are new paying customers generated?

Reply
 
 
Oct 25, 2017 09:52:49   #
boatbob2
 
You cant beat up the first 4 guys,thats r****t,,,that works for our poor people.....

Reply
Oct 25, 2017 10:00:33   #
Ve'hoe
 
Govt is not a business,,, is your problem, taxpayers are not customers, they are owners

The govt has NO money,, that they have not first taken,,,,, therefore "giving back" is your socialist mistake,,,,,,

The govt "returns" what it did not deserve or need,,,,, to the rightful owners,,,,

The govt "giving" the money to anyone is also a problem,,,,,,,,,, it increases "spending",,,, with money that did not belong to the govt in the first place,,, which then becomes "debt",,,, since it is technically "borrowed" (more like stolen)


Here is a simple test,,, even you might get a D+,,,, when your checkbook is at zero,,,, yet you have more checks left,,, can you keep writing checks and spending????

The govt does,,,,, with l*****t "programs",, where in it "feeds the Po",,,, like animals in a political zoo.. to v**e for them,, or the food ceases



PeterS wrote:
So if everyone was envious of what others were charged why didn't the beat up the four freeloaders to start with? And what was the purpose of the $20 cut to begin with? In economics one reduces prices to stimulate new business--only the government give back money for no reason--if this is a class in economic then how are new paying customers generated?

Reply
Oct 25, 2017 13:46:26   #
buffalo Loc: Texas
 
The US produces about $40,000 per year for each man, woman and child, or about $160,000 per family of 4. What is the socially just distribution of the national pie? A better distribution would probably enable the poor man (higher wages to start) to buy his own beer and the rich one to still purchase his imported champagne.

In a nation like the U.S. where the national income is only $160,000 for each family of 4, it's better to have some living on one meal a day and others living under bridges.

We should probably make more cardboard boxes to provide affordable housing. A $5 box out of $160,000 wouldn't break anybody.

Reply
Oct 25, 2017 18:58:27   #
boatbob2
 
IF,you will live in a cardboard box,I will buy the box for you,And I will give you $2.00 a day to live on,,,,,,

Reply
 
 
Oct 25, 2017 19:07:49   #
Ve'hoe
 
I guess it wouldnt but who wants to live in a box????


Why does the left think that is an answer?

buffalo wrote:
The US produces about $40,000 per year for each man, woman and child, or about $160,000 per family of 4. What is the socially just distribution of the national pie? A better distribution would probably enable the poor man (higher wages to start) to buy his own beer and the rich one to still purchase his imported champagne.

In a nation like the U.S. where the national income is only $160,000 for each family of 4, it's better to have some living on one meal a day and others living under bridges.

We should probably make more cardboard boxes to provide affordable housing. A $5 box out of $160,000 wouldn't break anybody.
The US produces about $40,000 per year for each ma... (show quote)

Reply
Oct 25, 2017 21:10:27   #
emarine
 
popparod wrote:
Read this the other day and it makes sense and bears repeating.


Think about it the next time someone complains that the rich people get the lion's share of a tax cut.

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!



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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
Read this the other day and it makes sense and bea... (show quote)




Good post...now if the very wealthy fessed up & paid the tax on the actual amounts of wealth they really have I would be happy to buy them a beer... there are trillions in wealth offshore hiding from taxes...

Reply
Oct 25, 2017 21:38:30   #
Loki Loc: Georgia
 
emarine wrote:
Good post...now if the very wealthy fessed up & paid the tax on the actual amounts of wealth they really have I would be happy to buy them a beer... there are trillions in wealth offshore hiding from taxes...


Something that so many people fail to realize is that the truly wealthy will NEVER, EVER pay taxes on their total wealth. The Tax Code is so full of loopholes I doubt anyone can find them all. Many of these loopholes are products of Democratic Administrations, also. Rich people are movers and shakers in politics. They donate lots of money to politicians and they don't do it out of altruism. Until there are campaign finance reform and term limits NOTHING WILL CHANGE. It doesn't matter which party controls Congress.

Reply
Oct 25, 2017 23:53:03   #
Ve'hoe
 
the wealthy dont get "income" they get dividends,,,, thats why Warren Buffet says his secretary pays more taxes than he does,,,,,
and % wise she does,,,,,, because she gets "income",,,,,,, he takes dividends,,,,, through a trust,,,,, and pays no taxes because he pays for democrat politicians,,,,, and repubs,,,,,,,

Excuse me, if you already knew that........


emarine wrote:
Good post...now if the very wealthy fessed up & paid the tax on the actual amounts of wealth they really have I would be happy to buy them a beer... there are trillions in wealth offshore hiding from taxes...

Reply
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