[Rhodes22-list] Taxes & Politics

[Paul Grandholm]

Before you read this, it is a commentary on taxes & politics.  It is just 
one guy's opinion (not even necessarily mine) so don't go crazy with this 
& start a war.  If you don't like this kind of stuff, delete it now and 
don't read it. - Paul


A VERY simple way to understand the tax laws. Read on -- it does

make you think!!



Let's put tax cuts in terms everyone can understand. Suppose that every
day,

ten men go out for dinner. 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 $7, the eighth $12, the ninth
$18,

and the tenth man -- the richest -- would pay $59.



That's what they decided to do. The ten men ate dinner in the restaurant

every day and seemed quite happy with the arrangement -- until one day,
the

owner threw them a curve (in tax language a tax cut).



"Since you are all such good customers," he said, "I'm going to reduce
the

cost of your daily meal by $20." So now dinner for the ten only cost
$80.00.



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 -- the paying customers? How could they divvy up the
$20

windfall so that everyone would get his "fair share?"



The six men 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 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
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
his

earlier $59.



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,

but he, (pointing to the tenth) 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, a little late what was very

important. They were FIFTY TWO DOLLARS short of paying the bill!



Imagine that!



And that, boys and girls, journalists and college instructors, is how the

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 anymore. Where would that leave
the

rest?



Unfortunately, most taxing authorities anywhere cannot seem to grasp this

rather straight-forward logic!



T. Davies

Professor of Accounting &Chair,

Division of Accounting and Business Law

The University of South Dakota

School of Business





========================
Paul Grandholm
C&H Technology
GrandPower Components Div.
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