Header Ad Module

Collapse

Announcement

Collapse
No announcement yet.

Tax Cuts - A Simple Lesson In Economics

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • muppet
    replied
    Hi Graeme

    Thanks very much. Haven't got my copy yet so looking forward to seeing it.

    Regards

    Leave a comment:


  • orion
    replied
    Thanks Muppet, just got my photo redone for the reprint of my book, didn't like the other one.
    I saw your write up in the HB Property Investors' Association for Property Talk today, well done.

    Regards
    Graeme Fowler

    Leave a comment:


  • muppet
    replied
    Hi Graeme

    Love your avatar. It makes you look quite distinguished.

    The story makes good reading as well. I suppose it should be in the Forum Funnies but being tax related..........

    Regards

    Leave a comment:


  • orion
    replied
    I'm not sure where it came from either, someone from Australia e-mailed it to me.

    Regards
    Graeme Fowler

    Leave a comment:


  • muppet
    replied
    Hi Trunkz

    Welcome to the forum.

    I am not sure where Graeme came by it, because it was also in Noel Whitacker's newsletter which I got next day. Still it makes for good reading.

    Regards

    Leave a comment:


  • Trunkz
    replied
    What a great post

    That is very much the most simplistic analogy of a tax system well put together orion and great post muppet

    Trunkz

    Leave a comment:


  • cube
    replied
    There was an interesting letter in the Herald today from a couple who had worked and worked to get out of the benefit system, only to have been re-captured by it in the budget (not that they have to take their entitlement, but why wouldn't you?).

    They would have preferred a tax cut to help them keep out of the system and "cut out all the state middlemen needed to administer a broadened welfare net, and let families get on with looking agter their own best interests".

    cube

    Leave a comment:


  • Suze
    replied
    Loved the post. Actually puts the tax system into perspective beautifully,doesn't it?

    Suze

    Leave a comment:


  • muppet
    started a topic Tax Cuts - A Simple Lesson In Economics

    Tax Cuts - A Simple Lesson In Economics

    Hi Guys

    An email I received from Orion on how our tax system works.

    Tax Cuts - A Simple Lesson In Economics

    This is how the cookie crumbles. Please read it carefully.

    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.
    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 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 at the
    table anymore.
    There are lots of good restaurants in Europe and the Caribbean.
    Regards
Working...
X