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# New Numbers

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Posted 11/18/2012
I love this explanation with beer:

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 beer in the bar every day and seemed quite happy with the arrangement, until one day, the bar 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 just cost \$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 eveyrbody'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 paid \$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 \$50 instead of \$59 (15% savings).

Each of the six was better off than before. And, the first four continued to drink for free. But, once outside the bar, 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 \$9!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got nine times more than I!"

"That's true!!" shouted the seventh man. "Why should he get \$9 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 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.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

For those who understand, no explanation is needed.

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

Mommy of two darling girls :)

Posted 11/18/2012

I guess I should have used smaller words.

People with money are good at making decisions that save themselves money. They see a potential for themselves to have higher taxes on the ways they make their money, so they are making transactions now that save them money. This causes a slight dip in the market. This fact does not imply my belief in anything. It's just a very obvious observation. It doesn't mean I agree or disagree with ______ policy. It does not make me a republican or democrat. It's just a statement about a trend in the stock market.

Que: vague attack on tax policy

--

Me + DH = DD ('08) DS ('11) DS ('13)

Roxie84
Last edited 11/18/2012
"The first four men (the poorest) would pay nothing."

Cute analogy but utterly FALSE. Poor people might not pay income tax but they still pay sales taxes and payroll taxes.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/18/who-doesnt-pay-taxes-in-charts/

"The vast majority of households that don’t pay federal income taxes are either elderly or paying payroll taxes. As you can see below, 60 percent of those who don’t pay income tax are still working and paying taxes for Social Security and Medicare. Their tax liability is just too low to qualify for the income tax. Another 22 percent of non-payers are retirees.
Only about 7.9 percent of households are not paying any federal taxes at all. That’s usually because they’re either unemployed or on disability or students or are very poor."

" In fact, they might start drinking overseas where the atmosphere is somewhat friendlier."

Buh-bye! Don't let the door hit you on your way to Somalia or any other third world country because European countries & Canada pay a much higher rate in taxes than the US.
--

"Breastfeeding is only free, if a woman's time is worth nothing"

DS#1: 7/20/11     LO EDD: 2/18/13

CMCT2012
Posted 11/18/2012
Wow Roxie whatever you just wrote got thrown out the window by your last paragraph. Congrats you can certainly debate with the best of them. :)
--

I wish I was Felicia. She's ALWAYS going somewhere!

This is my cup of care.

Oh look, it's empty

loopymom4 · Original Poster
Posted 11/18/2012

Switzerland doesn't. Monaco does't. How about Hungary or even Russia? Then there's the Islands and the middle East.

--

“The first time someone shows you who they are, believe them.”
― Maya Angelou

Roxie84
Posted 11/18/2012
What exactly is wrong with my last paragraph?
Flowerpot is stating with her cute analogy that the rich are just going to flee overseas because they don't want to pay Clinton era INCOME TAXES. So, unless they're planning on going to a third world country where taxes are low then her point is moot.
--

"Breastfeeding is only free, if a woman's time is worth nothing"

DS#1: 7/20/11     LO EDD: 2/18/13

Roxie84
Posted 11/18/2012
Russia?? Hahaha. Good luck ;).
--

"Breastfeeding is only free, if a woman's time is worth nothing"

DS#1: 7/20/11     LO EDD: 2/18/13

loopymom4 · Original Poster
Posted 11/18/2012

13% flat for personal income.

--

“The first time someone shows you who they are, believe them.”
― Maya Angelou

CMCT2012
Posted 11/18/2012
Roxie you have to be crazy to think the rich are not finding every single loophole possible to pay taxes. You should.be asking yourself why that is. Here let me tell you.

Its because no one wants to pay anymore taxes then they absolutely have to. The rich can say all they want about wanting to pay more. But look on their payroll and I garuntee they have tax advisors to get them out every thing they possibly can. They wouldn't be doing their job if they didn't.
--

I wish I was Felicia. She's ALWAYS going somewhere!

This is my cup of care.

Oh look, it's empty

CMCT2012
Posted 11/18/2012
www.treasurydirect.gov/govt/reports...

Just in case you wanted to donate a little as well. have to pay the fair share.
--

I wish I was Felicia. She's ALWAYS going somewhere!

This is my cup of care.

Oh look, it's empty
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