Dear Jim Bob,
I was listening to Obama and McCain arguing the other night about who was gonna get taxed higher if Obama gets elected. Jim Bob what’s the simplest way to understand whose taxes are really going up?
Rodney Rippoff
Rocky Boy, Idaho
Dear Rodney,
OK Rodney I’ll give it to you real straight. Obama says 95% of Americans will not get their taxes raised to pay for all the welfare stuff he wants to crank up. What he really means is that there is a 95% chance your taxes will get raised if you are a Republican! That’s why Obama gets real excited when he starts talking about raising taxes.
You see Rodney, Republicans are usually the people who own businesses and hire people. When you own your own business you usually make more money than the people you hire. That’s just sort of the way it works and Democrats don’t like business owners to make more than their employees. The people Democrats look up to are the ones who make more money than the people who pay them! (Like professional athletes, movie stars,news anchor persons, and politicians).
Now, you might be asking yourself, “Does becoming a Republican mean I will be a business owner and guarantee I will make a lot of money”? The answer is no Rodney. It’s after you get your business going and you start making money that you wind up becoming a Republican! Lot’s of Republicans were actually Democrats when they were young, before they decided to take some risks and actually try to make their life better on purpose. They became Republicans after they built their businesses and their income to a higher level. They became Republicans after they began to figure out how much of their life and their money the government was really controlling and confiscating!
Here’s the goofy part Rodney. A lot more people would probably be Republicans if they really understood how much they are really being taxed! They don’t notice it because they never get their hands on the money – it just disappears from their paycheck via a “payroll deduction”. The way it is right now most of them think Income Taxes are about getting a cash windfall refund just before Easter every year. They believe income taxes are about getting money from the government!
Hope that clears this up for you Rodney.
Love,
©2008, James C. Norman
All Rights Reserved
{ 2 comments… read them below or add one }
Jim Bob, thanks for the tax lesson! Here is another good lesson on taxes.
This is our Tax System explained in terms most everyone can understand.
We call it “Bar Stool Economics”
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. Even though the rich guy had paid much more all along and now got
much less back, he went along with the plan anyway.
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 got’ ‘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, 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 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
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
Awesome Tom Simply Awesome!