Canadian Economics 101 Watch

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canuck
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#1
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#1
I got this off a another site, pretty funny.


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 Canadians pay their 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 dinner.

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 (having moved to Chicago the day before), 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, ladies and gentlemen, 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 the United States, Europe and the Caribbean.
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yawn
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#2
Report 13 years ago
#2
(Original post by canuck)
I got this off a another site, pretty funny.


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 Canadians pay their 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 dinner.

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 (having moved to Chicago the day before), 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, ladies and gentlemen, 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 the United States, Europe and the Caribbean.
Thus has it always been - that's called 'capitalism'!
John82
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That is pure genius!!!

It's not capitalism though, its wealth redistribution. If it were capitalism then each person would pay $10 and recieve $2 from the reduction, there would be no discrimination.
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Sam2k
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#4
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#4
(Original post by canuck)
I got this off a another site, pretty funny.


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 Canadians pay their 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 dinner.

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 (having moved to Chicago the day before), 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, ladies and gentlemen, 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 the United States, Europe and the Caribbean.
That's just how it works. The rich pay the most and they get the most back.
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yawn
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#5
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#5
(Original post by Moncal)
That's just how it works. The rich pay the most and they get the most back.

Where did you get the idea that the rich pay the most from?

On a pro rata basis they pay less than any one else. They can afford to pay the best accountants to manipulate any loop holes to avoid tax as well.

In actual fact, certainly in this country, it is the middle-earners who are 'fleeced' the most. And they get the least back.
Made in the USA
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#6
(Original post by yawn)
Where did you get the idea that the rich pay the most from?

On a pro rata basis they pay less than any one else. They can afford to pay the best accountants to manipulate any loop holes to avoid tax as well.

In actual fact, certainly in this country, it is the middle-earners who are 'fleeced' the most. And they get the least back.
In the USA, the top 20 percent pay over 80% of all taxes.
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psychic_satori
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(Original post by canuck)
I got this off a another site, pretty funny.
Hey, that was pretty good. I'll have to email it to my economist brother.
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Howard
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#8
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(Original post by Made in the USA)
In the USA, the top 20 percent pay over 80% of all taxes.
I paid virtually nada to Uncle Sam last year. I just finished my tax return for 04 as a matter of fact and on earning well over $100k I paid a grand total of about $10k in federal tax. Now I've had time to play around with my allowances/depeciations/other write off items I'll be receiving a $6k refund meaning I paid a about $4k in taxes last year.

Now I'm not complaining about it (in fact I'm doing a gig) but there's little wonder we have such a defecit when relatively high earners like me are paying so little.
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Made in the USA
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(Original post by Howard)
I paid virtually nada to Uncle Sam last year. I just finished my tax return for 04 as a matter of fact and on earning well over $100k I paid a grand total of about $10k in federal tax. Now I've had time to play around with my allowances/depeciations/other write off items I'll be receiving a $6k refund meaning I paid a about $4k in taxes last year.

Now I'm not complaining about it (in fact I'm doing a gig) but there's little wonder we have such a defecit when relatively high earners like me are paying so little.
I'd love to know how you managed to avoid getting fleeced by Uncle Sam. I'm sure the IRS would love to know too.

I think the deficit is more from the federal government spending money like a drunken sailor than a lack of tax revenue. Bush should actually veto a spending bill for once. I like the president, but wish he was more fiscally conservative.
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muncrun
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This went around in 2000 as a justification for the Bush tax cuts. The flaw is that reducing income and estate marginal tax rates is only "fair" (in the way the article suggests) if they are the only taxes that people pay. Instead, the rich get a big gain from reduced income, capital gains, and estate tax reductions while the poor keep paying quite high payroll taxes (which are not levied on wages over $90k or on any non-wage income).
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Howard
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#11
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(Original post by Made in the USA)
I'd love to know how you managed to avoid getting fleeced by Uncle Sam. I'm sure the IRS would love to know too.

I think the deficit is more from the federal government spending money like a drunken sailor than a lack of tax revenue. Bush should actually veto a spending bill for once. I like the president, but wish he was more fiscally conservative.
They do know. I just filed my tax return taking every allowance I could possibly claim using TurboTax. I also own a couple of rental properties so they're always good for showing a nice loss.
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Douglas
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#12
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#12
(Original post by canuck)
I got this off a another site, pretty funny.
Tax Cuts - A Simple Lesson In Economics
Canuck, I get the point of the article.
Question is..........You're a liberal, what are your thoughts ??
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