Looking for a particular thread about why the rich don't pay taxes - Tilted Forum Project Discussion Community

CityOfAngels · 05-16-2006, 10:18 AM

I forgot who wrote it, and what the exact title is, but I remember it detailing the process that the wealthy go through in order to find loopholes in the tax system, making it so they pay little to no taxes. I wanted to print it out and show it to a co-worker (it came up in the topic of discussion), but after searching here and on google, I couldn't find it. I would appreciate if someone could please direct me to it. Thanks!

BigBen · 05-16-2006, 11:59 AM

How Taxes work!

This is a very good explanation of how income taxes really works!! Sometimes politicians, journalist and others exclaim, "It's just a tax cut for the rich" and it is just accepted to be fact. But what does that really mean? Just in case you are not completely clear on this issue, I hope the following will help. Please read it carefully. It puts tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for all 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 ate dinner in the restaurant everyday 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 meal by $20." Dinner 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 eat 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 eat their meal.

So, 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:

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 $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to eat 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 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 surrounded the tenth and beat him up.

The next night the tenth man 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 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 eating overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D
Professor of Economics, University of Georgia

Is this the one you are talking about?

Randerolf · 05-16-2006, 03:20 PM

Hmmm, I don't recall the thread CityOfAngels, but the subject is discussed in [URL=Hmmm, I don't recall the thread CityOfAngels, but the subject is discussed in the book [i] Rich Dad Poor Dad [/i].

As much as I hate taxes, I must say that Dr. Kamerschen did not write the aforementioned artile. Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it.

Snopes.com

CityOfAngels · 05-17-2006, 12:55 PM

Thanks! It seems the thread has been deleted. What a shame; it was such a well-written explanation.

05-16-2006, 11:59 AM	#2 (permalink)
BigBen Comedian Location: Use the search button	How Taxes work! This is a very good explanation of how income taxes really works!! Sometimes politicians, journalist and others exclaim, "It's just a tax cut for the rich" and it is just accepted to be fact. But what does that really mean? Just in case you are not completely clear on this issue, I hope the following will help. Please read it carefully. It puts tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner and the bill for all 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 ate dinner in the restaurant everyday 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 meal by $20." Dinner 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 eat 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 eat their meal. So, 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: 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 $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to eat 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 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 surrounded the tenth and beat him up. The next night the tenth man 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 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 eating overseas where the atmosphere is somewhat friendlier. David R. Kamerschen, Ph.D Professor of Economics, University of Georgia Is this the one you are talking about? __________________ 3.141592654 Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.

05-16-2006, 03:20 PM	#3 (permalink)
Randerolf Fireball Location: ~	Hmmm, I don't recall the thread CityOfAngels, but the subject is discussed in [URL=Hmmm, I don't recall the thread CityOfAngels, but the subject is discussed in the book [i] Rich Dad Poor Dad [/i]. As much as I hate taxes, I must say that Dr. Kamerschen did not write the aforementioned artile. Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it. Snopes.com Last edited by Randerolf; 05-16-2006 at 03:22 PM..