# taxes, tax cuts

United States
January 21, 2007 5:15am CST
A friend sent this to me so I do not want to take credit. It may be a little long, but does a good job explaining tax cuts in the United States. Suppose that everyday, ten men go for dinner and the bill comes to \$100. If they paid their bill the way we pay taxes, it would go something like: 1. Four men (the poorest) would pay nothing. 2. The fifth man would pay \$1. 3. The sixth man would pay \$3. 4. The seventh man would pay \$7. 5. The eight man would pay \$12. 6. The ninth man would pay \$18. 7. The last man (the richest) would pay \$59. Total paid is \$100. The ten men ate at the dinner everyday and the owner decided to reduce their daily meal rate by giving them a 20% discount (tax cut). The group of men decided to pay as before so the four poor men would still pay nothing for the meal they ate. But if the 20% dicount was divided evenly among the remaining men, they would each get \$3.33. This would mean that the fifth and sixth man would be getting paid to eat their meal. The owner of the dinner suggested that it would be fair to divide the savings according to what each man had paid before. So: 1. The first four men (the poorest) still paid nothing. 2. The fifth man now paid nothing (100% cut) 3. The sixth man now paid \$2 instead of \$3 (33% cut) 4. The seventh man now paid \$5 instead of \$7 (28% cut) 5. The eighth man now paid \$9 instead of \$12 (25% cut) 6. The ninth man now paid \$14 instead of \$18 (22% cut) 7. The tenth man now paid \$50 instead of \$59 (15% cut) Total paid is now \$80. Each of the men that were paying are better off than before, but they began to compare their savings (tax cuts). Soon, the fifth man complained he had only received a \$1 cut while the tenth man received nine times more. A similar comparison was made by the sixth, seventh, eighth, and ninth men with complaints as well. Finally the four poor men joined in, complaining that the rich get the largest discounts and that is is unfair to the poor. The nine men ganged up on the tenth (and wealthiest) member of the group and beat him up. The following day the tenth man did not show up to the dinner (moved his residence and business overseas), but the nine decided to eat anyway. At the end of their meal, the owner brought them the bill that included the 20% discount (tax cut), but excluded the tenth meal. Only then did they realize that by driving away their wealthy freind, they did not have enough money to pay the bill.
1 response
@Smith2028 (797)
• United States
24 Jan 07
Excellent analogy.