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How the Tax System Works

TexasBred

Well-known member
HOW OUR TAX SYSTEM WORKS! THINK ABOUT IT BEFORE YOU VOTE IN NOVEMBER!

Suppose that every day, ten men go out for beer and 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 would pay $7.

The eighth would pay $12.

The ninth would pay $18.

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


So, that's what they decided to do. The ten men drank in the bar 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, hen said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $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 drink for free. But what about the other six men - the paying custom ers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 drink his beer. So, the bar 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 pay $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 drink 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!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only 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!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics, University
of Georgia
 

mytfarms

Well-known member
Texas Bred, that was excellent. I think that you're exactly right. Many people simply don't appreciate what the rich do to pay the taxes on our country. Unfortunately, so many are "middle class" that promising tax reductions on them makes them want to vote for you. BUT, if a person, say like Obama, is going to take taxes away from the poor and gives more responsibility to the better paid, the wealthier may very well get sick and tired of it. If they quit paying or move to another country, then Obama is going to be in one heck of a spot going back on his word and having to raise taxes on the less wealthy. Then again, there's no credibility to a politicians word, so he was for it before he was against it. Simple explanation. :?
 

jodywy

Well-known member
“It is paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rate now…Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus”____John F. Kennedy,1917-1963
 

TSR

Well-known member
jodywy said:
“It is paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rate now…Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus”____John F. Kennedy,1917-1963

Well its hasn't worked too well under this administration the past 8yrs has it?
 

TSR

Well-known member
TexasBred said:
HOW OUR TAX SYSTEM WORKS! THINK ABOUT IT BEFORE YOU VOTE IN NOVEMBER!

Suppose that every day, ten men go out for beer and 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 would pay $7.

The eighth would pay $12.

The ninth would pay $18.

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


So, that's what they decided to do. The ten men drank in the bar 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, hen said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $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 drink for free. But what about the other six men - the paying custom ers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 drink his beer. So, the bar 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 pay $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 drink 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!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only 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!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics, University
of Georgia

Oh they will show up all right,just like Exxon Mobil pays those higher taxes to foreign countries (with the gov't's help of course) because it is PROFITABLE for them.
 

Sandhusker

Well-known member
So you think our government would rather the oil companies pay foreign taxes than domestic?

Back to the question, what have tax revenues done?
 

TexasBred

Well-known member
TSR said:
TexasBred said:
HOW OUR TAX SYSTEM WORKS! THINK ABOUT IT BEFORE YOU VOTE IN NOVEMBER!

Suppose that every day, ten men go out for beer and 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 would pay $7.

The eighth would pay $12.

The ninth would pay $18.

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


So, that's what they decided to do. The ten men drank in the bar 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, hen said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $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 drink for free. But what about the other six men - the paying custom ers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 drink his beer. So, the bar 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 pay $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 drink 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!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only 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!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics, University
of Georgia

Oh they will show up all right,just like Exxon Mobil pays those higher taxes to foreign countries (with the gov't's help of course) because it is PROFITABLE for them.

TSR do you have a 401-K?? If so and if it's worth a damn it's got Exxon/Mobile stock in it. Be glad. They haven't hurt you. Heck the only taxes you probably pay or in sales tax anyway. Exxon/Mobile does sell a lot overseas. You see they don't put all the gov't requirements on the crude or the refined product. Only two requirements....price and it has to burn. :wink: You can't blame Exxon/Mobil. It's just good business. Darn right they make money. Their shareholders demand it. You want it as well. They are not in the business to accomodate anybody by selling their product at less than the best price available. Their CEO is the one who should be getting a performance bonus. Ever wonder what we would have to pay for oil if it were not for Exxon/Mobile, Conoco/Phillips, and others? If everyone had your attitude toward oil companies we might soon find out what it's like to not have them. Now...tell us about your taxes for last year....you probably qualified for the earned income credit...low income, and a house full of little biscuit snappers.
 

TSR

Well-known member
TexasBred said:
TSR said:
TexasBred said:
HOW OUR TAX SYSTEM WORKS! THINK ABOUT IT BEFORE YOU VOTE IN NOVEMBER!

Suppose that every day, ten men go out for beer and 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 would pay $7.

The eighth would pay $12.

The ninth would pay $18.

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


So, that's what they decided to do. The ten men drank in the bar 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, hen said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $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 drink for free. But what about the other six men - the paying custom ers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 drink his beer. So, the bar 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 pay $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 drink 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!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only 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!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics, University
of Georgia

Oh they will show up all right,just like Exxon Mobil pays those higher taxes to foreign countries (with the gov't's help of course) because it is PROFITABLE for them.

TSR do you have a 401-K?? If so and if it's worth a damn it's got Exxon/Mobile stock in it. Be glad. They haven't hurt you. Heck the only taxes you probably pay or in sales tax anyway. Exxon/Mobile does sell a lot overseas. You see they don't put all the gov't requirements on the crude or the refined product. Only two requirements....price and it has to burn. :wink: You can't blame Exxon/Mobil. It's just good business. Darn right they make money. Their shareholders demand it. You want it as well. They are not in the business to accomodate anybody by selling their product at less than the best price available. Their CEO is the one who should be getting a performance bonus. Ever wonder what we would have to pay for oil if it were not for Exxon/Mobile, Conoco/Phillips, and others? If everyone had your attitude toward oil companies we might soon find out what it's like to not have them. Now...tell us about your taxes for last year....you probably qualified for the earned income credit...low income, and a house full of little biscuit snappers.

Oh I don't think the oil companies will leave the most lucrative market in the world especially when that market's gov't is helping them pay their foreign taxes. How many times are we gonna argue this? I am for giving tax breaks to small start-up companies here in America (who will keep jobs here in America) not multi-national conglomerates who are making more money than anyone in the history of the world. If you like multinational conglomerates to get those tax breaks and not keep everything here in America businesses then we just have a different philosphy. No hard feelings, just a different philosophy. As I have said before after any business starts sustaining profitablility then the tax breaks should stop. I hope we don't keep paying unemployment/welfare benefits after a person goes back to work and can make a decent living.

My portfolio has a manager whom I pay to take care of it. I don't tell him his business and he doesn't tell me how to raise cattle. As far as my tax situation is concerned that's my business, just like yours is your business.
 

TSR

Well-known member
Sandhusker said:
So you think our government would rather the oil companies pay foreign taxes than domestic?

Back to the question, what have tax revenues done?

Shusker you can't just look at revenues without looking at expenses(deficits). I am sure when you go to assess a person you are loaning money to you look at both. I mean, if we have such an excess,if we have done so well, why are the taxpayers funding this 800billion bail out.
 

TexasBred

Well-known member
TSR said:
TexasBred said:
TSR said:
Oh they will show up all right,just like Exxon Mobil pays those higher taxes to foreign countries (with the gov't's help of course) because it is PROFITABLE for them.

TSR do you have a 401-K?? If so and if it's worth a damn it's got Exxon/Mobile stock in it. Be glad. They haven't hurt you. Heck the only taxes you probably pay or in sales tax anyway. Exxon/Mobile does sell a lot overseas. You see they don't put all the gov't requirements on the crude or the refined product. Only two requirements....price and it has to burn. :wink: You can't blame Exxon/Mobil. It's just good business. Darn right they make money. Their shareholders demand it. You want it as well. They are not in the business to accomodate anybody by selling their product at less than the best price available. Their CEO is the one who should be getting a performance bonus. Ever wonder what we would have to pay for oil if it were not for Exxon/Mobile, Conoco/Phillips, and others? If everyone had your attitude toward oil companies we might soon find out what it's like to not have them. Now...tell us about your taxes for last year....you probably qualified for the earned income credit...low income, and a house full of little biscuit snappers.

Oh I don't think the oil companies will leave the most lucrative market in the world especially when that market's gov't is helping them pay their foreign taxes. How many times are we gonna argue this? I am for giving tax breaks to small start-up companies here in America (who will keep jobs here in America) not multi-national conglomerates who are making more money than anyone in the history of the world. If you like multinational conglomerates to get those tax breaks and not keep everything here in America businesses then we just have a different philosphy. No hard feelings, just a different philosophy. As I have said before after any business starts sustaining profitablility then the tax breaks should stop. I hope we don't keep paying unemployment/welfare benefits after a person goes back to work and can make a decent living.

My portfolio has a manager whom I pay to take care of it. I don't tell him his business and he doesn't tell me how to raise cattle. As far as my tax situation is concerned that's my business, just like yours is your business.

Typical liberal response. "I'm all for small start up business". Just don't get too big or make too much money or we'll bring you to your knees". You guys use to talk about "those making over a million a year"...then it was "Half a million a year"...now it's "Quarter Million a year". Wouldn't you want to give Exxon a tax abatement if they built a refinery in your county??? Or WalMart if they built a distribution center in your area??Yet it's ok for you to and your cronies to make all you want whether legal or not. As for the unemployment benefits.....we've been doing that for years. Same for Workman's comp....half the people drawing it are working. (Just more welfare).
 

Sandhusker

Well-known member
TSR said:
Sandhusker said:
So you think our government would rather the oil companies pay foreign taxes than domestic?

Back to the question, what have tax revenues done?

Shusker you can't just look at revenues without looking at expenses(deficits). I am sure when you go to assess a person you are loaning money to you look at both. I mean, if we have such an excess,if we have done so well, why are the taxpayers funding this 800billion bail out.

Go look at the quote you brought. All JFK was talking about was revenues.
 

Sandhusker

Well-known member
TSR, "Oh I don't think the oil companies will leave the most lucrative market in the world especially when that market's gov't is helping them pay their foreign taxes. How many times are we gonna argue this?"

You need to think about this, TSR. You act like it is by design that our oil companies have to pay big taxes overseas. It's not, it's a byproduct of the necessity for the companies to go overseas to get oil. They're paying foreign taxes because they have to buy their oil overseas because Pelosi and the liberals let the Sierra Club write our domestic drilling policy.

Put yourself in their shoes; Would you rather buy your oil from the other side of the world where there is always political risk that threatens even the supply, put it in tankers and then pay shipping to haul it the 5000 miles to a US refinery OR would you rather get your oil from 50 miles away from the US and pay shipping for 500 miles and not have to worry about a revolution, change in government, war, etc... that would disrupt the supply? Of course they would prefer the latter, that's a no-brainer.

What is another nobrainer is that if they did get their oil here, they would be paying US all those monies that they're paying foreign goverments, along with royalties and leases! But, they can't do this because of the dang libs who won't let them drill here and instead chase them and their checkbooks overseas! (then they bitch about all the taxes they pay abroad :roll: ) They would be happier, we would be happier (and richer), but it 'aint happening because of the no-brainers like Pelosi, Reid, etal that keep blocking it. THERE is your problem!
 
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