Way off topic, but some food for thought?
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Subject: Our Tax System
Date: Tue, 25 Jun 2002 19:29:16 -0400
Disposition-Notification-To: "Rich Shlafer"
Thread-Topic: Our Tax System
From "Rich Shlafer" <rshlafer at degnan-shlafer.com>
To: "Robert Shlafer (E-mail)" <firstname.lastname@example.org>
The following is one of the best explanations I have heard of that
really puts our system into perspective that we need everyone in the US
to understand. Here it goes:
TAX INFO. 101 -
OUR PERSONAL TAX SYSTEM AND HOW IT WORKS
I was having lunch with one of my favorite clients last week and the
conversation turned to the government's recent round of tax cuts."I'm
opposed to those tax cuts," the retired college instructor
they benefit the rich. The rich get much more money back than ordinary
taxpayers like you and me and that's not fair.""But the rich pay more in
first place," I argued, "so it stands to reason that they'd get more
back."I could tell that my friend was unimpressed by this meager
Even college instructors are a prisoner of the myth that the "rich"
get a free ride in America. Nothing could be further from the
put tax cuts in terms everyone can understand. Suppose that every day
men go to a restaurant for dinner. The bill for all ten comes to $100.
was paid the way we pay our taxes, then it would go like this:
The first four men would pay nothing; the fifth would pay $1; the sixth
would pay $3; the seventh $7; the eighth $12 and the nineth $18. The
man (the r! richest) would pay $59.The 10 men ate dinner in the
every day and seemed quite happy with the arrangement until the owner
them a curve. Since you are all such good customers, he said, I'm going
reduce the cost of your daily meal by $20.
Now dinner for the 10 only costs $80. The first four are unaffected.
still eat for free. Can you figure out how to divvy up the $20 savings
the remaining six so that everyone gets his fair share? The men realize
that $20 divided by 6 is $3.33, but if they subtract that from
share, then the fifth man and the sixth man would end up being paid to
The restaurant owner suggested that it would be fair to reduce each
bill by roughly the same amount, and he proceeded to work out the
each should pay. And so now the fifth man paid nothing, the sixth
$2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving
tenth man with a bill of $52 instead of $59.
Outside the restaurant, the men began to compare their savings. "I only
dollar out the $20," complained the sixth man, pointing to the
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
$2? The wealthy get all the breaks!""Wait a minute," yelled the first
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 10th man didn't show up for dinner, so the nine sat
and ate without him. But when it came time to pay the bill,they
something important. They were $52 short! And that, boys, girls and
instructors, is how America's 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
may not show up at the table any more.
There are lots of good restaurants in Switzerland and the Caribbean or
better know as "tax havens countries."
Partner in Charge of Tax Services
Degnan & Shlafer, CPAs
8825 Perimeter Park Boulevard, Suite 303
Jacksonville, FL 32216-1112
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