skywatch

How are tax system works to support the downtrodden:

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," he 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 customers? 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!

Makes me wonder if we are blaming the right folks for the mess we are in now.

Zapata

.....

yawn

bryris

This is exactly what is happening out there. Anyone who thinks otherwise is living under a rock.

Lab Rat

TAXES.

If anyone needs ONE reason as to why the middle class is shrinking then one needs to look no further than the issue of taxes. And that is not just my opinion either. Take a look at your pay stubs and see how much is being taken out compared to how much you gross.

The solution is very simple and the numbers speak for themselves. Eliminate ALL sources of income tax and institute a national sales tax instead. If you want fair then there is not a more fair way to do this since everyone is paying the same percentage.

The middle class isn't shrinking because of capitalism, it is shrinking because of taxes (i.e., bigger government).

Kilgore Trout

The New Middle Class Contract > Publications > National Affairs

Avroman

That was an abombination of a movie if you are looking at it for being a documentary. I grew up in the realm of that movie. It was atrociously unrepresentative of the realities of GM and Flint, Michigan then. Were some things ultimately correct long term, yes. Was Moore a prophet, hardly. Much of what was shown was so vastly untrue it barely could even qualify as fiction much less as a documentary. Moore clearly had (and continues to have) an agenda that he is pushing with the making of his movies. He is a socialist. As long as people take his work in that mindset, fine. Those that take it as true life unbiased documentary need to be shipped to China or North Korea.

bryris

As a fledgling CPA, the more complex the tax code, the better for my paycheck. However, from a larger societal view, I agree with you on this.

Even better, as an interim step would be to get rid of the pay as you go system. This idea of "take home" pay masks the true realities of what is going on. Everyone should be paid gross and have to physically write a check to the government every quarter for FICA and federal taxes.

The realities of tossing two billion here, three billion there to fund new vehicles for people while their used ones are disabled with sodium silicate and crushed might hit home a little bit more.

Lab Rat

I can certainly understand your predicament from a CPA's perspective.

I totally agree with the elimination of the "pay as you go" system. Most people just pay taxes and hope for a refund. If we had to write quarterly taxes each year, I think people would walk into the ballot boxes more informed as to who they are voting for and why.

Lab Rat

Probably the best analysis regarding Moore thus far on this board.

Zapata stated that Moore's latest pravda film had to with unregulated capitalism as opposed to a bash on capitalism.

If that is the case, then why did he title the move "Capitalism"? Hmmm.

IrishTiger

Good post. Moore admitted to being a socialist on Hannity last night. I can't remember the exact terminology, but it was pretty funny.

I still can't believe what came out of his mouth during that interview. I just can't understand or comprehend the fact that we have people that think like that in this country. To hear what he had to say about Iraq, Afghanistan and 9/11 is almost laughable.

I'm sure the interview is on YouTube by now. It's about 30 mins of good talking. It was actually a very good interview, neither of them got heated or argumentative. That's what I love about Sean - he is such a good guy.