Thanks to Pat & Sue for sharing this joke? with us.
Our Tax System
OUR PERSONAL TAX SYSTEM AND HOW IT WORKS
Best explanation given yet........
I was having lunch with one of my favorite clients last week and the
conversation turned to the government's recent round of tax cuts.
"I'm opposed to those tax cuts," the retired college instructor declared,
"because they benefit the rich. The rich get much more money back than
ordinary taxpayers like you and me and that's not fair."
"But the rich pay more in the first place," I argued, "so it stands to
reason that they'd get more money back."
I could tell that my friend was unimpressed by this meager argument. Even
college instructors are a prisoner of the myth that the "rich" somehow get
a free ride in America. Nothing could be further from the truth.
Let's put tax cuts in terms everyone can understand. Suppose that every
day 10 men go to a restaurant for dinner. The bill for all ten comes to $100.
If it were paid the way we pay our taxes, the first four men would pay
nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7;
the eighth $12; the ninth $18. The tenth man (the richest) would pay $59.
The 10 men ate dinner in the restaurant every day and seemed quite happy
with the arrangement until 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
meal
by $20. Now dinner for the 10 only costs $80.
The first four are unaffected. They still eat for free. Can you figure
out how to divvy up the $20 savings among the remaining six so that everyone
gets his fair share? The men realize that $20 divided by 6 is $3.33, but
if they subtract that from everybody's share, then the fifth man and the sixth
man
would end up being paid to eat their meal.
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 now 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 $59.
Outside the restaurant, the men began to compare their savings. "I only
got a dollar out of the $20," complained the sixth man, pointing to the tenth,
"and 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 something important. They were $52 short!
And that, boys, girls and college instructors, is how America's 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 any more. There are lots of good restaurants
in Switzerland and the Caribbean!
Chris Stubbs
CBS Search Associates
