Message: Our tax system You may have seen this
Ten men go out for lunch together every day. The bill for all ten comes out to an even $100.
They decided that they would pay the bill the way we pay our taxes. So it went 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.
The ten men ate lunch every day and were 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 meals by $20. Lunches for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so they refigure each one's share.
The first four still paid nothing. (0% savings)
The fifth man previously paid $1.00 now paid nothing. (100% savings)
The sixth man now paid $2 instead of $3. (33% savings)
The seventh man now paid $5 instead of $7. (28% savings)
The eighth man now paid $9 instead of $12. (25% savings)
The ninth man now paid $14 instead of $18. (22% savings)
The tenth man now paid $49 instead of $59. (16% savings)
Each of the six were 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 I got." "That's true!" shouted the seventh man, "Why should he get $10 back when I only got 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, and that's just NOT FAIR!"
The nine men surrounded the tenth and beat the holy crap out of him.
The next day the tenth man didn't show up to eat lunch, 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 them to pay up!
And that, ladies and gentlemen, Journalists, and college professors, is how our tax system works. The people who pay the highest taxes get the most benefits 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 their lunches 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.
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