This is the simplest explanation of how taxes and tax
cuts in this country work that I have ever read:

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.
The tenth man (the richest) would pay $59.
So, 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. "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.

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 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 $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. "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!

Because in life, the richest guy depends upon the employment of poorest four in order to continue making money, so if he walks away from the table, he loses all of his money.

Ask California and the mass exodus of wealthy people moving to Idaho.

Ask California and the mass exodus of wealthy people moving to Idaho.

Plenty of Californians moving here, but how are you defining "wealthy"?

Yeah, I guess there's always more poor people to exploit in another state.

I'm thinking more like Wal-Marts paying workers shit, not giving health insurance, and firing workers for organizing. If those workers don't think they're being exploited, they're wrong.


But, back to the analogy. Why does each guy get a different percentage back? Why don't they all get their meals dropped by 20% (the amount of the windfall)?

4=free
5=.80
6=2.40
7=5.60
8=9.60
9=14.40
10=47.20

Also, no one that pays no taxes bitches that they're overly burdened.

If this is really how tax breaks work in the US then I'd have to say that I might be wrong about complaining about tax breaks for the rich. If this is how it works of course.

I got this e-mail from my sister today, and thought it could be a good discussion starter:


Something about this doesn't seem quite right. Any help?

Yeah it is missing some stuff. 1-4 also get a tip at the end of the night, food stamps, free education, a loan to attend college, a better chance at loans from the state and federal government, unemployment checks, free public transporation, welfare and a lap dance from Davey Jones all payed for by 5-10.

Sorry, I missed out on a business loan and I'm taking it out on customers 1-4.

I'm thinking more like Wal-Marts paying workers shit, not giving health insurance, and firing workers for organizing. If those workers don't think they're being exploited, they're wrong.

Because in life, the richest guy depends upon the employment of poorest four in order to continue making money

Also, no one that pays no taxes bitches that they're overly burdened.

If this is really how tax breaks work in the US then I'd have to say that I might be wrong about complaining about tax breaks for the rich.

Alright, smarty-pants, you have to put that into restaurant terms. No one gets a college loan at dinner. No smashing reality into the analogy!!!

Here's a good description of tax distrobution:

http://www.taxfoundation.org/publications/show/542.html

Is this really how the tax code works?

Of course, getting a smaller percentage of the cut doesn't necessarily mean that the rich guy is paying a greater percentage of his income than the other dudes. I don't think the rich is this country ever come close to paying the percentage of their income that poorer or middle class people pay.

If anyone thinks I'm wrong. I don't care. If you say you know the tax code and I'm wrong... whatever, you're lying.

I know the tax code, and yes, you're wrong.