How Taxes Work

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scottc
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How Taxes Work

Post by scottc » Mon Feb 06, 2006 3:09 pm

Suppose that every day, ten people 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 (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 (the richest) would pay $59. So, that’s what they decided to do.

They ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a problem. “Since you are all such good customers,” the owner 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 were unaffected, they would still eat for free.

What about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get their ‘fair share’?

The six paying customers realised that $20 divided by six is $3.33. If they subtracted that from everybody’s share, then the fifth and the sixth would each end up being ‘PAID’ to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce each person’s bill by roughly the same amount, and proceeded to work out the amounts each should pay.

And so – The fifth, 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. The first four continued to eat for free. Once outside the restaurant, they began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth, pointing to the tenth diner “but they got $10!”

“Yeah, that’s right,” exclaimed the fifth. “I only saved a dollar, too. It’s unfair that they got ten times more than me!”

“That’s true!!” shouted the seventh. “Why should they get $10 back when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine surrounded and beat up the tenth diner.

The next night the tenth diner didn’t show up for dinner, so the nine sat down and ate without number ten. 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!

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 at the table any more. There are lots of good restaurants in Europe and the Caribbean.

norfdet
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Post by norfdet » Mon Feb 06, 2006 4:35 pm

The problem is that most of our society (atleast around here) is made up of the 4 that were eating for free but still continued to bitch about what everyone else got. So, eventually the government subsidized them by not only allowing them to eat for free but also paying them to eat for free. Then to top it off they were given free health care in case they became sick from eating what they were paid to eat for free. Then the rest of us (in the middle) have to pay 2.00 more to get 4.00 less so that the other people can continue to eat for free and get paid to do so. Meanwhile the 9th and 10th diner still continue to benefit from tax breaks and pocket more moey while the rest of us loose ground faster than we can make it up.

The only thing that I can hope for is that the first 4 diners had to eat with Billary Klinton and the bus to take them home was being driven by Ted Kennedy.

IZZY_T
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Post by IZZY_T » Mon Feb 06, 2006 6:01 pm

Taxes don't pay for anything.

Answer me why the government needs to take money from YOU in oder to make it's own money from thin air?

In fiat currancy, taxes only reinforce the notion of value, essentialy they help protect the "purchasing power" of the currancy by "balancing books."

This balacing of the books maintains the fiction of WORTH/value.

The "books" currently don't balance at all in respect to the PETROdolllar , thus our Dollar has sunk. In cylcles politicans like to spend and sometimes spend a little less (called "cutbacks").

Your "Dollar" is a note of DEBT, it becomes valuble only when debt is purchased in the form of Treasury Bills. Currantly the Gov. seems to be buying it's own T-bill's using carribean banks as a go-between...as China and Others pare down their purchases, and dump dollars for Gold/copper mines, Petrol fields, and other rescources.

(BTW, We are way over 8 trillion in debt, and it will never be fully paid off, in fact the "debt" cieling has risen yet again, while Bushco. has called for more "cuts". These cuts will not shrink debt _indeed NO PRESEDENT has ever shrunk the debt since Kennedy_ they will mearly slow it's growth.)

If anything our currancy is "backed" by the arrangement with OPEC to sell OIL in Federal Reseve Notes ( fiat "dollars"). Essentialy your greenback is backed up by Mecca, Medina and Ghadwar. Bush should be saying "Allah Hoo Akbar" when he get up in his rosey world.

OIL has gone up, partialy due to depletion, partialy due to the de-valuation of the PETRO-Dolar. Higher oil prices means the (privately owned) "Federal Reserve" can print-or issue electronicaly- more Dollars, and have it absorbed by still higher prices in oil.

This is needed to pay for wars, wars needed to keep Petroleum Sold in Federal Reserve Notes. Do you see the cycle?

This cycle of war and inflation has so far kept the stock market higher than it would be after a "crash" (often via inflation that looks like gains, sometimes via real defense spending) , while the Consumer Price Index has been manipulated to show little infaltion (by keeping Housing and Energy from being properly wiehted in the index survey.


THUS, the whole Republican Vs. Democrat stink is "Bread and Circus" for the "Asses Masses."

ENJOY.

scottc
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currency

Post by scottc » Mon Feb 06, 2006 6:57 pm

Look, that is why my currency of choice is lead, jacketed or hollow point works.

IZZY_T
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Post by IZZY_T » Wed Feb 08, 2006 1:38 am

lead sounds like a good currancy for the New World.

I would especaily like to see the goonies make change form a 50. :mrgreen:

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