America's Taxation System

[petey23]

Please do not dissolve this into a political discusiion.

EXPLAINING OUR UNITED STATES TAXING SYSTEM WITH BEER

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 beers 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 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 drink for free, but once outside the bar, 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 very important....they didn't have enough money between all of them for even half of the bill!

And that, boys and girls, is how our tax system works. The people who pay the highest taxes DO get the most benefit from a tax reduction. They also PAY more than the rest. 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.

[GeauxSioux]

To resolve the tax issue.....The Fair Tax

What does it do?

* A progressive national retail sales tax.

* A prebate to ensure no American pays federal taxes on spending up to the poverty level.

* Dollar-for-dollar federal revenue neutrality.

* Repeal of the 16th Amendment through companion legislation.

Before "poo-pooing" it, read the information on the wesbite or read the book. Educate yourself. If this were implemented, it would be fair and the wealthy wouldn't want to drink overseas and the ones that are getting drunk overseas would come home to drink.

[Oxbow6]

Please do not dissolve this into a political discusiion.

EXPLAINING OUR UNITED STATES TAXING SYSTEM WITH BEER

'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 very important....they didn't have enough money between all of them for even half of the bill!

And that, boys and girls, is how our tax system works. The people who pay the highest taxes DO get the most benefit from a tax reduction. They also PAY more than the rest. 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.

My nomination for best post---EVER--on this site! Look around at the collapsing housing market and stock market. We have become a country of what is mine is mine and what is yours is mine! This county is not economically "healthy" because of the barista at Starbucks that sleeps until noon and works his usual 4-10 pm shift just so he can get healthcare benefits and enough money to go a Dave Matthews concert. Nor is this country economically sound because we allow immigation but don't require those folks to speak the language subsequently they can't become employed to help with the tax burden. They are part of the tax burden. Even in Fargo I have lots of patients that I have seen for years at are immigrants, who still don't speak a lick of English are on Medicare and/or Medical Assistance and will nover be a contributing member of this society from a wage earning/tax revenue producing stand point. I could go on on, but I digress...

People who make the most pay the most taxes period! They then by that fact help support all those who don't want to work or can not work. Almost everything in this country come down to the 80/20 rule. Right now as it was mentioned, 80% of all taxes in the US come from only 20% of it's people. That is amazing when you think about it. We have a growing society that is part of the "taking" and not part of the "producing" and that is the simple fact. Not everyone is entitled to a new home or car, not entitled to have what the Jone's across the street have, but that is becoming the mentality of this country. We are 10-20 years away of becoming FRANCE. Everyone gets everything for free. Nobody wants to work more than 30 hours/week and oh by the way, they need 12 weeks vacation. You can't function as a society or country when you have more people wanting and less people producing. Taxing those that make the most doesn't solve the equation. Getting more people to give to the tax pot is. This philosophy of ENTITLEMENT that is and has been spreading across this country is what is getting us in this economic mess! Now I know there is wasteful speading in Washington, the war in Iraq, ect...but entitlement breads apathy and apathy kills productivity!!

But look on the bright side, after listening to the last Presidential debate, I'm in a win-win situation. Vote for Obama, and I get free healthcare! Vote for McCain and I'll get a free house! Winner Winner, chicken dinner!!!

[GeauxSioux]

I was listening to Neil Boortz this morning and he said that he received a call from his publisher asking if he had been doing any promotions for his Fair Tax book. Boortz told him no. It seems that the book has been flying off the shelf lately. People are looking for answers in these troubled times and if we could start an honest dialogue about the pros and cons about it, I think people would flock to the idea of the Fair Tax.

Boortz also noted that Knight Kiplinger mentioned the advantages of the Fair Tax in a recent piece entitled A New Economic Agenda

Reform the tax code. The best thing Washington could do to supercharge private savings would be to tax consumption rather than income. The Byzantine U.S. tax code (all 60,000 pages of it) should be scrapped. All present federal taxes -- on personal and corporate income, capital gains, estates, even payroll taxes (FICA) -- should be gradually replaced by a new, national consumer sales tax, collected by the states at the point of purchase and forwarded to Washington.

At every income level, big spenders would pay a lot of taxes, super savers much less. Poor people would get all their sales taxes rebated. (For more information on one version of a consumption tax, visit www.fairtax.org.)

[andtheHomeoftheSIOUX!!]

If you're in the higher income bracket and have the audacity to whine about paying higher taxes, by all means feel free to look for a lower paying job.

No, you didn't get it. It was the guys who weren't paying anything and then didn't get a rebate that were complaining. They then beat up the guy who was paying most of the tab. The next night, he wasn't there to pay...

[Oxbow6]

I get it, but it's a fictional story that was obviously made up by somebody who's been fortunate enough to live a privileged life.

Obviously you don't get it but it is fictional based on reality! "Fortunate" in most situations in today's society means hardwork and effort, which for most is becoming increasingly less due to the mentality of entitlement, laziness and apathy!

[GeauxSioux]

I can't stand Dave Matthews, but that's beside the point. What's wrong with sleeping till noon if you don't have to be to work until 4:00? What's wrong with working a 4:00-10:00 shift at Starbucks? Somebody has to work that shift, right? Perhaps I'm misunderstanding your point, and if so please explain so I don't think you're coming across as being condescending.

Regarding the 2nd part of your post that I underlined, I think it is appropriate for 80% of the taxes to be paid by 20% of the people when that 20% is hogging 80% of the wealth. You don't really expect the middle class and poor people to pay the same amount of taxes as the high rollers, do you? It's like that old song goes "Tax the rich, feed the poor, till there are no rich no more".

I think you are missing Petey23's point. The rich accept that they pay more in taxes. The problem is when there is a tax cut and their cut is more than the lower income people it is always defined as a tax cut for the rich. Those who classify it as such are clearly being disingenuous. It is class warfare and the redistribution of wealth, in short, socialism. If you continue to tax achievers at a higher and higher rate where is their incentive to succeed?

The company that I work for has been a successful one, especially in the past 10 years. Of course the owner of the company has been the major beneficiary of that success, but he has also raised the standard of living for those who have helped him achieve that success. If you raise his taxes, who is going to get hurt? Him? Maybe, but more likely it will be the employees. Benefits will be cut, jobs will be lost..... Putting more and more tax burden on the "rich" doesn't help the working class in America. It will increase unemployment and federal revenues will go down.

I know I keep pounding on this, but educate yourself on the Fair Tax. It is a workable solution to this country's tax system. The IRS could be abolished. The "rich" would pay more in taxes, because they consume more. Those below the poverty line wouldn't pay taxes. Those who want to live a frugal life, could do so and not be penalized for it. If you consume more you pay more in taxed. Simple.

[Oxbow6]

I can't stand Dave Matthews, but that's beside the point. What's wrong with sleeping till noon if you don't have to be to work until 4:00? What's wrong with working a 4:00-10:00 shift at Starbucks? Somebody has to work that shift, right? Perhaps I'm misunderstanding your point, and if so please explain so I don't think you're coming across as being condescending.

Regarding the 2nd part of your post that I underlined, I think it is appropriate for 80% of the taxes to be paid by 20% of the people when that 20% is hogging 80% of the wealth. You don't really expect the middle class and poor people to pay the same amount of taxes as the high rollers, do you? It's like that old song goes "Tax the rich, feed the poor, till there are no rich no more".

You are right that someone has to work those shifts. But if that is your "goal" in life, don't think you are entitled to "have" what the business owner, CEO/CFO or doctor has as he/she is getting to work by 7 am and working 40+ hours a week to HOG all the wealth. This isn't a socialism system yet! Bottom line is this country is being taken over by those who do less and want more--PERIOD!! Whether one thinks it is appropriate or not on the 80/20 tax situation in this country, those who don't pay in should be the last to complain about this nation's tax system and how "fair" it is.

Your terms of "appropriate" and "hogging", as well as your pathetic little ditty at the end of your last post are some of the reasons that this country is becoming so divided. When did it become the fault of those who put forth the effort to better themselves and work hard as it relates to the "plight" of those who are lazy, unwilling to work and have no self drive to make a better way for themselves? This nation has millions of stories of those who started with nothing and paved a way of success for themselves because of a dream, drive, effort and perserverance. How about promoting that philosophy vs. your socialism mentality??

[Oxbow6]

I think you are missing Petey23's point. The rich accept that they pay more in taxes. The problem is when there is a tax cut and their cut is more than the lower income people it is always defined as a tax cut for the rich. Those who classify it as such are clearly being disingenuous. It is class warfare and the redistribution of wealth, in short, socialism. If you continue to tax achievers at a higher and higher rate where is their incentive to succeed?

The company that I work for has been a successful one, especially in the past 10 years. Of course the owner of the company has been the major beneficiary of that success, but he has also raised the standard of living for those who have helped him achieve that success. If you raise his taxes, who is going to get hurt? Him? Maybe, but more likely it will be the employees. Benefits will be cut, jobs will be lost..... Putting more and more tax burden on the "rich" doesn't help the working class in America. It will increase unemployment and federal revenues will go down.

I know I keep pounding on this, but educate yourself on the Fair Tax. It is a workable solution to this country's tax system. The IRS could be abolished. The "rich" would pay more in taxes, because they consume more. Those below the poverty line wouldn't pay taxes. Those who want to live a frugal life, could do so and not be penalized for it. If you consume more you pay more in taxed. Simple.

The Fair Tax is a great concept, but to liberals it doesn't stick it to the "rich" as the current system does. And sticking it to the "rich" is a huge platform for the liberals in this country.

[Shawn-O]

There are billions of dollars that could be recouped from the "underground economy" under FairTax. Also, you need a valid Social Security number to qualify for the prebate. Think that might take care of some of the illegal immigration problem?

A good friend of mine recently became the primary FairTax contact for his congressional district, and he's fired up! It will be a difficult road, because Congress has the tax code as a tool to engineer social behavior. With recent economic events, maybe things are "up for grabs" enough where we have a window of opportunity to get something done. Sign me up.

[Oxbow6]

There are billions of dollars that could be recouped from the "underground economy" under FairTax. Also, you need a valid Social Security number to qualify for the prebate. Think that might take care of some of the illegal immigration problem?

A good friend of mine recently became the primary FairTax contact for his congressional district, and he's fired up! It will be a difficult road, because Congress has the tax code as a tool to engineer social behavior. With recent economic events, maybe things are "up for grabs" enough where we have a window of opportunity to get something done. Sign me up.

Totally agree, but again you will run into a situation where those who don't pay anything into the tax system now will. And the outcry by those people will be deafening! And in Washington, it is the squeaky wheel that gets the grease!! As much sense as the Fair Tax makes, I don't see it taking place in my lifetime.

[Shawn-O]

Totally agree, but again you will run into a situation where those who don't pay anything into the tax system now will. And the outcry by those people will be deafening! And in Washington, it is the squeaky wheel that gets the grease!! As much sense as the Fair Tax makes, I don't see it taking place in my lifetime.

I was thinking more along the lines of say, the drug dealer now paying federal sales tax for his Escalade. But I see what you're saying too.

[Oxbow6]

What you call hard work and effort is in reality being fortunate enough to have been given a great opportunity somewhere along the line. To most people, hard work and effort results in being overworked and underpaid.

You keep coming back to "fortunate". Fortunate is getting a hole in one or winning a lottery. Overworked and underpaid can be said by teachers, doctors, janitors, policeman... Try again because there aren't many who think they are overpaid and underworked.

[Oxbow6]

Spoken like a true high roller.

I don't know if you are in fact one of the fortunate few, or if you just think you're going to become one of them someday due to your hard work. But regardless, people who work long hours at various times of the day at jobs that may not be glamorous are not "lazy" or "unwilling to work". On the contrary, they work a helluva lot harder than the corportate suck-ups who spend half their work days on the golfcourse kissing corportate a$$.

As for what you referred to as a "pathetic little ditty", I suggest you do a little research on the background of the song I was making reference to before you make such a condescending remark about it.

Not a high roller but someone who understands personal accountability and responsibility for my own current situation and future. There are many people that work long hours, but if your job pays you 25K/year vs. someone who makes 100K/year, who's fault is that? Personal choices/decisions form the "fortunate" outcome that you speak of. A 24 year old single women who has no post-high school education with 4 kids by 3 different father isn't "unfortunate" because of someone who has made better educational and lifestyle choice to become "fortunate". You are an enabler for all of those who wake up mad/pissed at the world for their "unfortunate" situation, not because of their own poor decisions and choices that got them to that place, but because someone else is better off.

As far as the ditty, you posted it and I took it as it was posted.

[GeauxSioux]

That's just it. When the rich get richer at the expense of the middle and lower class, there's no good reason why they should be given incentive to hog an even bigger portion of the wealth than they're already hogging. The descrepancy between the have's and the have-not's is already way too big for the good of our nation as a whole. Those of us who are not among the 20% who selfishly hog 80% of the wealth can barely afford to pay our bills as it is, while the high rollers live in their mansions and go on exotic vacations every other week as they whine about having to pay more taxes than the rest of us who are not as fortunate as they are.

Dave, did you read my whole post or just one part. If you read this...

The company that I work for has been a successful one, especially in the past 10 years. Of course the owner of the company has been the major beneficiary of that success, but he has also raised the standard of living for those who have helped him achieve that success. If you raise his taxes, who is going to get hurt? Him? Maybe, but more likely it will be the employees. Benefits will be cut, jobs will be lost..... Putting more and more tax burden on the "rich" doesn't help the working class in America. It will increase unemployment and federal revenues will go down.

You would understand that when the owner of the company does well, others within the company do well. I am in the middle class, but would not want to see the upper class have their taxes increased just so it is more fair. How many lower income people do you see creating jobs for others? I would say very few. The job creation comes from those very people that you want to raise taxes on. They are the ones taking the risks. With those risks should come rewards. When they are rewarded we all gain with increased pay, benefits and more jobs.

[Oxbow6]

Dave, did you read my whole post or just one part. If you read this...You would understand that when the owner of the company does well, others within the company do well. I am in the middle class, but would not want to see the upper class have their taxes increased just so it is more fair. How many lower income people do you see creating jobs for others? I would say very few. The job creation comes from those very people that you want to raise taxes on. They are the ones taking the risks. With those risks should come rewards. When they are rewarded we all gain with increased pay, benefits and more jobs.

I'm with you here, but DaveK will never get past the point that those who do well are "hogging the wealth". His philosophy on taxes is true socialism--plain and simple. Lower income people by and large don't create jobs. Where is the risk by not taking responsibility/accountability for your own well being when you can point the finger at someone who is "hogging" what is rightfully yours!

Again, I get back to the fact that YOU, as an idividual, thru decisions and choices create your own "fortunate" circumstance(s).

[Oxbow6]

Teachers, janitors, and policemen are very much overworked and underpaid. Doctors not so much. They are compensated quite nicely for their time and effort. I keep coming back to fortunate because that's what it takes to become one of the 20% who pays 80% of the taxes. It isn't what you know, it's who you know. For each of the chosen few who are entitled to join that exclusive club, there are hundreds if not thousands of others who worked just as hard only to fall short because they weren't as lucky.

Really and you would know this how? I'm a doctor and I'd put my hours in a week of patient care, being on-call and doing charts up against your work week! Fortunate? Exclusive club? Let's see, I paid my way thru UND and Med school. So here is how my day goes DaveK. I work hard so that I can pay very high taxes, then my taxes go to cover the healthcare benefits of many of the patients I see via Medicaid and Medicare (and there are more and more getting on those programs). Then the government tells me how much they are going to pay me for seeing those government assisted patients that my taxes pay for! The patients I have that bitch the most are those who get their healthcare for free of which again my taxes pay for. Take your distorted view on this subject somewhere else because I sacrificed and made responsible choices and decisions to be "fortunate" only to have an idiot like you telling me that I'm "hogging the wealth".

[petey23]

Some people must have.

Some people have not.

But they

[GeauxSioux]

The reason that people have wanted to come to America for the past couple hundred years is that you can make your life what you want of it. The opportunities in this country are endless. If you choose not to take advantage of those opportunities, it is your own fault. I have taken some risks (decisions), some have worked, some have not. As those decisions brought me to where I am today, I can't complain.

I find it interesting that Dave comes down on the capitalist system and then cites teachers and policeman, as the overworked and underpaid. Typically teachers and policemen are government employees and not really part of the free market (capitalist) system. Their wages would be set by the government (Socialism?).

It is 2008 in America and your life is what you make of it. I hope I can say the same in 2010.

[Oxbow6]

Wow, you just showed your true colors by lowering yourself to name-calling. I never knew you were that kind of person. I guess I've learned something about you today.

Yes, you have. And I'd be willing to bet there is a majority on this site that agree with me. I'm not going to sit back and listen to someone with little factual knowledge or information on this topic. DaveK, I'll call it as I see it. Now if you want to come this debate with something more than an unsubstantiated opinion, i.e. "hogging", "fortunate", "privileged", please do so. But if you don't want to listen to the true facts in this thread, saying they are "fiction", on how this country's tax system really works, that make you nothing more than ignorant.

Doesn't bother me at the rate/amount of taxes I pay, but does bother me when someone like you has the onions to tell me that I'm not paying my fair share when I'm one of those 20% that is covering 80% of the tax bill in this country. Now go find an Obama rally to make yourself feel better about how you're not getting your fair share!

[Oxbow6]

I get it, but it's a fictional story that was obviously made up by somebody who's been fortunate enough to live a privileged life.

Does this ring a bell?

[BringDeanBack]

Does this ring a bell?

I think there is a distinction that needs to be made regarding this argument. I don't think anyone should have a problem with someone like Oxbow that takes the initiative and makes it through medical school. Even if Oxbow came from a wealthy family that paid his entire way (which it doesn't sound like happened), Oxbow had to work to get through school, no easy task I am sure. In my mind, someone like Oxbow deserves every penny he has. In America, doctors are in high demand/well paid and Oxbow made the personal choice to pursue that path. To be fair, not everyone is born with the ability to make it through med school.

I think a slightly different scenario is one where a family starts a business from scratch that grows into a money making machine. Then two generations down the line, junior takes over grandpa's business. Junior never had to worry about making career decisions or going to college because he knew granpappy and daddy would hand the business over to him. Another example, the way corporations stack their boards with the same people (some sitting on many different boards). It is a good old boys club, and John Q. Shareholder is powerless to enact any real change because the majority of the company's stock is owned by the very clowns sitting on these boards (or other high positions within company). In these scenarios, hard work means nothing as it is stictly a "who you know" type of situation.

As frustrating as the latter examples can be (and seemingly unfair), I don't know how one would go about changing things. Unfortunately, in the game of life, some people are stuck with the poopy end of the stick.

[Oxbow6]

You're an elitest snob, I get it. No need to further explain yourself.

And with that you just cemented my point to everyone that will read this thread that you are BOTH ignorant and an idiot!

Give me your address and I'll throw you a few bucks if that will make you feel better! See I'm willing to "share".

By the way just read that 40% of American families are over $50K in debt, I suppose that has everything thing to do with people like me "hogging the wealth", not paying enough in taxes, and the government not giving those people enough freebies and has absolutely nothing to do with the fact that lots people live way above their means and don't take any personal repsonsibility for their own financial well being!

PS--Another fact, not "fiction", I came out of my schooling and training over $150K in debt way back when. Took responsibility and accountability, made some sacrifices along the way and paid it all back. Didn't and don't have new cars, new huge house, 64" plasma TV or a boat. I guess if I'm an "elitest snob" because of all I did to make a better way for myself and family, I hope my kids turn out to be "elitest snobs" just like me, too.

[jimdahl]

This thread so far demonstrates why I've always feared politics on the board. People who could otherwise happily sit around debating the Sioux become absolute jerks to each other, and it's likely to taint their impressions and reactions to each other's Sioux-related posts outside this thread, this doing actual long-term harm to the community.

I was leery when I saw a post on taxation, but hoped a discussion on economics could occur without becoming political. Ever the optimist, I'll resist the temptation to just close the thread, but please only continue debating if you can do so without the personal attacks on each other. This is certainly an area in which good people can disagree.

[Oxbow6]

This thread so far demonstrates why I've always feared politics on the board. People who could otherwise happily sit around debating the Sioux become absolute jerks to each other, and it's likely to taint their impressions and reactions to each other's Sioux-related posts outside this thread, this doing actual long-term harm to the community.

I was leery when I saw a post on taxation, but hoped a discussion on economics could occur without becoming political. Ever the optimist, I'll resist the temptation to just close the thread, but please only continue debating if you can do so without the personal attacks on each other. This is certainly an area in which good people can disagree.

The problem with these types of threads is you have some people that will refute facts with unsubstantiated opinions. Everyone is entitled to their opinion, but when an opinion ignores facts and reality that's where I have a problem. DaveK, and everyone else of his philosophical ilk, is entitled to his opinion, but when facts are discounted as fiction just because he/she doesn't like that way that facts line up, I'll take offense to that and call you out for what you really are--a person of ignorance. I don't have a problem with those who have a different view on anything as long as they can come to a debate with facts to support their opinion. That fosters a healthy debate and respect.