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Wiley50 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:03 PM
Original message
Can Anyone Help Me Disprove This RW Tax Fable?
Taxing the People

Sometimes politicians, journalists and the liberal left exclaim; "It's just a tax cut for the rich!" and it is just accepted to be fact.
But what does that really mean?
Just in case you are not completely clear on this issue, I hope the following will help. Please read it carefully.
Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for dinner 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 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." Dinner 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 eat 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 eat their meal.
So, the restaurant owner suggested:

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... the least proportionate 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 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 first nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for dinner, 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, boys and girls, 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 eating overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D
Professor of Economics
University of Georgia
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WCGreen Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:07 PM
Response to Original message
1. It doesn't even matter....
That tenth guy is enabled and protected and has more at stake for the stability of our country and the systems in place to protect free commerce and trade therefor, he shoul pay more for the privledge of living in the US...

That's the bottome line and you can take it too the bank...
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Ksec Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:08 PM
Response to Original message
2. Well
To break that down and disprove it would take more time than I have right now. I have no problem with the richest paying the most taxes.
They have all the wealth. Those who have all the wealth should be paying the most. Cutting their taxes is bullshit.
If I were rich I would expect to pay the most. The way I see it is if they dont like it they can always move. That aint gonna happen but if it does, seeya.
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:12 PM
Response to Original message
3. "...eating overseas where the atmosphere is somewhat friendlier."
Edited on Fri Dec-15-06 11:13 PM by QuestionAll

you mean they don't have taxes overseas?

the wealthy obviously benefit the most from being in this country/society- they SHOULD have a larger share of the tab.
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Sgent Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 08:33 AM
Response to Reply #3
37. True
but the argument to that is that the wealthy cannot move (taxwise) overseas even if they wanted too.
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benddem Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:15 PM
Response to Original message
4. All you have to do
is point to "the biggest tax increase in history" the lie they told about Clinton. The country had the one of the longest periods of prosperity in history. They didn't seem to stop spending then.
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Bozita Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:15 PM
Response to Original message
5. He's saying the Walmart heirs will take their $$$ and run off to Switzerland ...
... where their money can purchase quality stuff, unlike the junk sold at Walmart.

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baldguy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:17 PM
Response to Original message
6. The first four split one slice of bread a 8-oz of water.
The tenth gets an eight course meal with several different wines with each course.

And he got his money by cheating the other nine.

Actally, America's wealth is more concentrated than that. The are fewer rich people and many more poor people:

% of US Population % of Wealth Owned
Top 1%..........................................38.1%
Top 96-99%......................................21.3%
Top 90-95%......................................11.5%
Top 80-89%......................................12.5%
Top 60-79%......................................11.9%
General 40-59%...................................4.5%
Bottom 40%.......................................0.2%

The poorest of the poor are 6 people out of 10, not 4
The richest of the rich are 1/2 of a person out of 10, or 1 out of 20.
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:18 PM
Response to Original message
Edited on Fri Dec-15-06 11:19 PM by Warpy
That's all you need to mention to debunk it. The poorest are getting about a 6.2% hit. His employer matches it for a total of 12.4%. Since 40% goes to the general fund along with income taxes, that poorest of the poor is paying the first nickel of every dollar he earns in de facto income taxes. He gets no deductions, he pays it on every dollar he takes in.

Five percent income tax on top of 7.4% going to support retired people doesn't sound like a lot until you consider the poorest workers are paid LESS than subsistence. That means they can't afford safe housing, they can't afford to go to a doctor when they get sick, and their diet is hazardous to their health. That extra five percent could mean the difference in affording better food, at the very least.

No tax, my ass.
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Erika Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:30 PM
Response to Reply #7
12. Fantastic and succinct post
You said it far better than my effort.
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piedmont Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:25 PM
Response to Original message
8. point out what they ate:
guys 1-4: bowl of porridge
5 Slice of cheese pizza
6 Spaghetti marinara
7 Fried chicken and vegetables
8 Salmon fillet
9 Rib-eye steak and baked potato
10 Fillet mignon and lobster tail, with Dom Perignon to wash it down
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MaraJade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:56 AM
Response to Reply #8
23. This is wonderful and right on point--
Chances are that the men who ate free got the most meager or worst food. I would even venture
to say that the restaurant staff served them leftovers from the prior day or even food retrieved
from the dumpster.

Every person paying a bit more would have a fresher or more expensive meal.

THIS is how the tax system REALLY works. The poor get little or nothing out of it--
(if a person only makes $5000 per year (thus qualifying for the free meal), then giving
them the Earned Income Tax Credit or Tax Forgiveness may only put another $3000 to $5000 in
their pockets. This equates to an income of only about $700 to $820 per month, barely enough to
pay the rent on a one-bedroom apartment in most places. So they get a free meal of porridge
or far worse--but then they go home to the steam grate and cardboard box.

The next five people have to pay not only for their meal, but for the Earned Income Credit given to
the first four people. In effect, each one of their meals costs at least an extra $3000.
The additional $3000 goes on their credit cards and they are charged interest of at least 20% on that.
The ninth guy pays his off in a few months, but the other four carry the debt for longer, and it costs
them much more than the original additional $3000.

And so it goes, right on up to the top, where the rich guy simply writes the whole meal off as a
business expense and gets a tax deduction from the government, which winds up making his meal
free. More than free, in fact since he is literally paid for consuming it.

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bluerum Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:25 PM
Response to Original message
9. First of all, no one is eating for free. The initial premise is simply false.
We all work, and we all pay taxes on our income. The rich however, earn money off the investment of their massive wealth. They do not have to sweat and toil. For that they should be thankful.

Secondly, the rich do NOT dine with the poor - meaning the poorest have to work and toil for their weekly paycheck, the rich simply live off their sweat by investing in the companies that employ the poor (Ie: Walmart) You ain't catching no rich man sucking down burgers at Micky D's and you ain't catching no rich retired man greeting customers at Walmart.

Third, this is NOT how the tax system works. This is a gross misrepresentation designed to cow the simple minded. In our society people are taxed on their INCOME - not on what they eat. Duh. This is simply a false misleading argument. It is bogus RW divisive hate rhetoric.

Finally, if there were other countries that the rich could get away with as much as they do here in this country, don't you think that they would have been long fucking gone? The fact is that tax policies in this country heavily favor the rich and they damn well know it.

Like I am even going to feel the tiniest bit sorry for someone who is able to pay more taxes in a year than what my total yearly income is.
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buddysmellgood Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:27 PM
Response to Original message
10. I don't have to read the whole thing. The richest at the table ate all the food. Some were
allowed to take food from the serving tray after he was finished. Others were allowed to eat scraps when the rich were done. The poorest were allowed to dumpster dive after doing the dishes.
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Erika Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:33 PM
Response to Reply #10
13. Right out of Dickens and Hugo
The rich should not be denigrated but they need to quit the entitlement bit.
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Erika Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:27 PM
Response to Original message
11. There has to be a sense of fairness
The poor pay a far greater percentage of their income into taxes than do the rich just for basic needs. The income tax is far from being the only tax paid. The poor pay payroll taxes, sales taxes, gas taxes, etc. They must pay for drivers licenses, car registration, and many other user "fees".

The cost of defense should largely be borne by the rich. In an attack on this country, the estate owners with 16 car garages risk a far greater loss than the apartment rented by two families to give them a place to sleep.
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OPERATIONMINDCRIME Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:42 PM
Response to Original message
14. Problem Is, Much Of It I Don't Disagree With. I Think Everybody Is Taxed More Than Enough.
Edited on Fri Dec-15-06 11:43 PM by OPERATIONMINDCRIME
It's probably one of the only viewpoints I have that may in fact be more in line with the other side than our side.

When broken down the rich do pay more than enough of their share in taxes. So do the rest of us. I personally either would prefer some sort of flat tax, but even more than that I'm a firm believer that not a ONE of our taxes need to be raised and in fact EVERYONES taxes should be lowered, but that there should be some serious fiscal responsibility going on in government. This is the one issue I'm completely bi-partisan on, as in I'll attack both sides. Though recently the Republicans have been disgraceful in their handling of the budget, when it comes down to it no matter WHO controls congress, Dem or repub, the spending that goes on and the cost of some of these things is outright pathetic. I don't care who is in charge. Billions of dollars are spent each year on wasteful crap. Billions are spent on things that cost 50 times more than they would cost a citizen. Billions of dollars just flowing here, flowing there, as if money grows on trees. There is not an entity on the face of this earth that could convince me that if every governmental transaction was scrutinized and the best price gotten on goods without gouging, and only real projects and programs funded, and pork barrel spending disposed of, that we wouldn't have more than enough money to do what we needed and still have money left to give every damn American even further tax breaks.

Way I see it, the rich are not anywhere close to blame for deficits or otherwise. I think it's almost offensive how much of their earnings some of them have to give to the government. I think it's offensive how much we have to give as well. But I don't think the solution is taxing the rich. I think the solution is actually spending money responsibly and sanely, and not spending $300,000 for a fucking $40,000 Hummer. If we actually had some scrutinizing fuckers in Congress with sole purpose of getting the best value for dollar and weighing legitimacy of expenditures (like we all do when considering a purchase), then I have no doubt in my mind we'd have plenty of money to run this country, fund social programs, and still give a 30% fucking tax break to all Americans. Like I implied, I'd wager 40% of every friggin dollar spent by our government is either towards waste or overpaying. That's the problem I have with taxes. Our money is given away by a bunch of careless fuckers who think money grows on trees. And I don't care who is in charge. Congress as a whole just loves spending their money like it's water.

So anyway, there's my rant. Just my take on the situation, though I'm uncertain how much agreement I may find.
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Erika Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:23 AM
Response to Reply #14
17. W gave tax cuts to the rich
He gave nothing to the poor. The rich has their estates to lose if attacks. The poor have little to lose.

Who should pay for the defense?
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OPERATIONMINDCRIME Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:29 AM
Response to Reply #17
18. You Obviously Didn't Even Bother To Read Or Acknowledge Anything I Wrote, So I Fail To See How This
can possibly turn out to be a productive conversation if you're going to continue to choose to ignore my points entirely.

The rich are taxed more than enough already, as are the middle class and poor. None of them or their tax levels are the problem. The problem is the irresponsible manner in which congress uses all of our money to begin with.

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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:16 AM
Response to Reply #14
24. I largely don't have too much to disagree except that I believe the rich pay fewer taxes than...
Edited on Sat Dec-16-06 01:20 AM by Selatius
most folks in the middle class.

There was an article around not long ago where Warren Buffett had people in his office compare how much of their income was taken away through taxes, and it turned out Buffett paid the least amount of taxes out of his whole office in terms of percentages, even though he made more money in a single year than perhaps most will ever make in their entire lives, and unlike most rich people in his range, he didn't use any tax planning at all to take advantage of loopholes and credits and such. He simply paid the full amount without deductions.

Theres class warfare, all right, Mr. Buffett said, but its my class, the rich class, thats making war, and were winning. /

I'm in favor of gaining oversight over the war contracting going on. There's war profiteers who are making money, while blood is flowing in the streets. I think we should cut the pork, prosecute the profiteers, balance the budget, and make a serious effort to pay off the national debt. I'm in favor of repealing Bush's tax cuts for the top 1% on the condition that the pork is cut out and an effort is put forward to pay off the national debt.
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OPERATIONMINDCRIME Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:40 AM
Response to Reply #24
27. My Only Comment Would Be:
Edited on Sat Dec-16-06 01:41 AM by OPERATIONMINDCRIME
Does that mean the rich are paying too little or could it potentially be more accurate to say that the middle class is paying too much?

Guess there's two ways to slice it, where you were perceiving the former and I am a supporter of the latter.

I think the rich, even with their loopholes, are paying a tremendous amount in taxes and shouldn't be required to pay more. If the percentage comes out less in certain comparisons to some in the middle class or lower class, to me I don't see that as meaning the rich need to pay even more. I take that as meaning the middle and lower classes need to pay even less.

But like I stated originally, I think ALL economic classes pay too much. Until some serious effort, and by serious I mean effort like the nation has never before come close to seeing from congress, to control spending and really scrutinize every contract, purchase, program and funding prior to any approval. This is one thing I'm strangely stubborn about: That if that were done there isn't a person in America who couldn't have their taxes slashed significantly.
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:46 AM
Response to Reply #27
28. Well, I would say the rich are paying too little, and the poor pay too much.
Edited on Sat Dec-16-06 01:49 AM by Selatius
A truly progressive tax code would have the situation reversed, but the tax code in reality is loaded with pork and giveaways to various interests. In truth, the code operates more like a regressive tax code than anything else. I would say tax cuts should be enacted for the poorest, while tax increases should be enacted on the very wealthiest. The only question is to what degree, and my only prerequisite there for this arena is that the shifting tax brackets should not jeopardize programs like Head Start or the Pell Grant program and other programs aimed at the poor and needy.

My problem isn't with social programs to help people. My problem is with pork and a tax code that generally favors the wealthy and sticks the tab on the middle class and the growing underclass in America.
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OPERATIONMINDCRIME Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 02:04 AM
Response to Reply #28
31. I Just Can't Support That.
Edited on Sat Dec-16-06 02:06 AM by OPERATIONMINDCRIME
The rich pay an obscene amount of money to the government already. I know it might not be as big a percentage as you or others might want, but I just could never agree that the countless thousands and thousands of dollars they pay already, regardless of how much they make, isn't enough. They pay an obscene amount, and I can understand why they'd try and exploit every loophole they possibly could.

I do agree, however, that the other classes need to pay less taxes, since there is so little if any discretionary income for so many families any more, and I think those who work for a living should always have enough after necessities to be able to enjoy life a little. I think we all deserve that much. I think the reason we don't have more discretionary income is because we do pay thousands each year to the government, when half of it is being thrown around and wasted as if it were so easy to come by. It's the government spending and irresponsibility that's the problem, not that the rich need to pay tens of thousands of additional dollars. They pay enough. They pay more than enough. So do we.

I do also agree with you and want to clarify that when I say responsible spending and critical eyes, that I do not want nor condone any of our beneficial social programs being cut. In fact, I not only believe ALL classes could get huge tax breaks if congress used true financial scrutiny, but that the most important social programs could be funded even more and even additional ones created.

Look at how much money our government brings in annually. I'm sorry, but it is easily in my opinion twice as much than would be necessary to purchase, fund and otherwise financially take care of any damn thing this country requires, defense and all.

As I said, I'm just stubborn with this. The rich pay more than enough as does everyone else. I don't support any tax increases for anyone. But what I will agree to, if I haven't portrayed this yet, is that if there are to be tax cuts at all the most immediate ones should be to the lower and middle classes prior to the rich getting any tax breaks. I think with extreme fiscal responsibility and policy in time ALL of us could have our taxes reduced significantly. But in the meantime, until we learn how to spend wisely as a nation, the tax cuts should start from the bottom up. I have no problem with that whatsoever, since the rich obviously have more than enough capability to survive and enjoy life however they see fit and aren't in any desperate need of tax cuts, though many in the lower classes are. But I only support cutting taxes, even if that means leaving the riches taxes where they currently are. I just won't support tax increases for anyone. We all are paying more than we should.

And my upfront apologies for redundancy. I'm a bit loopy on pain medication right now and tend to ramble and repeat points when in that state of mind. So forgive me for the rambling.
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Bozita Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 02:14 AM
Response to Reply #31
33. Publicly funded elections -- Get the "donations" out of the decisions
Edited on Sat Dec-16-06 02:19 AM by Bozita
They're not donations. They're bribes.

Our government is for sale. To the highest bidders, of course.

Take the fundraising out of the elections.

Cause massive layoffs just where we need them ... on K Street.
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:51 AM
Response to Reply #27
29. except for that nasty little national debt...
even if spending were completely controlled and scrutinized*, the debt would still have to be serviced.

and we'd also have to shave a bunch off the military budget- and after what the meatgrinder in iraq has done to military men and machines, we won't be cutting defense spending for quite some time, if EVER.

*btw- i remeber reading an article a couple years after the 'repuke revolution' that basically said that when the congressmen with the r's came into power, they had planned to do pretty much what you suggest- but they found out that there was actually not very much discretionary spending to save on.
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Tactical Progressive Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-15-06 11:50 PM
Response to Original message
15. Yeah: Move to another country if you don't like it here.
Edited on Fri Dec-15-06 11:51 PM by Tactical Progressive

I'm tired of arguing with demagoguing right-wing assholes. I think it's well past time to start treating them with as little respect as they treat everyone else with their lies and distortions.

I say double their taxes until the debt is paid off, everyone is fed-clothed-housed-medicined, and whatever else we can think of.

Oh look, they're not leaving. Guess it isn't so unfair here after all.
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TygrBright Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:09 AM
Response to Original message
16. Well, here's the deal, see... have to parse it out a little further. Look at what's on the table, as it were:

The first four guys have a (dirty) glass of water and stale breadsticks.
The fifth guy has a cup of weak tea and stale breadsticks.
The sixth guy has a cup of soup and a glass of water.
The seventh guy has an egg salad sandwich and iced tea.
The eighth guy has a french dip sandwich with a side of fries and a root beer.
The ninth guy has broiled walleye with a baked potato and a salad, with a beer.
The tenth guy has a shrimp cocktail appetizer, escargot, a prime rib entree, a side of au gratin potatoes, a ceasar salad, bananas foster for dessert, and a magnum of champagne to wash it all down.

Any questions?

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gulliver Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:40 AM
Response to Original message
19. Pure bunk. Let's change the story to make it accurate.
Edited on Sat Dec-16-06 12:48 AM by gulliver
The restaurant owner didn't lower the cost of the dinner to $80. He just said he was reducing it to $80. The rich guy had made a deal with him. The deal was made to look just like the original story above. Everyone was told they got a share of the "savings." They argued about it, but they each thought they were getting something out of it -- because they were all stupid except the rich guy.

The rich guy simply told the owner to put an additional $40 on the tabs of the other guys. Since the other guys were idiots, they never bothered keeping track of their tabs themselves. They just trusted the owner and paid on their tabs at the end of the month, never really noticing that the tabs just kept getting higher and higher like clockwork. "I know you're good for it," said the owner. "You and your kids."

The owner got $20 more out of the deal than he was getting before. The rich guy got a big break on what he was paying for dinner. The rest of the guys were too stupid to notice they got screwed. Everyone lived happily ever after -- except the kids of the dumb guys. They couldn't afford college, were broke all the time, were stuck paying off their fathers' tabs, and the rich guy got them in a street fight where half of them were killed or maimed.
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Bozita Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:48 AM
Response to Reply #19
21. Sounds like a marriage of "The Godfather" and "West Side Story"
Can't wait for the DVD.
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nosmokes Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 12:46 AM
Response to Original message
20. first off, it doesn't work that way.
the first 4 men, the poorest, would be seated last at the table.
their places would be dirty and they would hafta to clean them before being able to eat. they would also hafta clean dishes their flat ware. and they would have only water to drink, no wine, soda, coffee or tea. all of this while the other 6 are already dining.

the fifth man, paying a buck, he'd hafta do the same thing, but maybe he could have a soda to drink .

the sixth man would be sitting in a padded chair, as opposed to the plain wooden ones of the first five.
the seventh man would a padded chair w/ arms, dessert, a cocktail and a choice of meatloaf or chicken.

the eighth man would would get what #7 had but he could have a 6oz. steak.
number nine gets a bigger steak.
and the tenth man gets filet mignon and lobster, fine wine and after dinner cocktails.

the first five, of course, ate rice and beans and maybe some fatback flavored greens. and they got to lunch late and hadta leave early because they work more hours in 3 days at 2 jobs than number 10 does in 2 weeks at his.
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clu Donating Member (228 posts) Send PM | Profile | Ignore Sat Dec-16-06 12:56 AM
Response to Original message
22. i'd honestly be surprised
if a university prof. helped spread that story. i imagine that the comparison focuses only on income taxes and there are numerous other taxes paid by the bottom 50%
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valerief Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:20 AM
Response to Original message
25. Where do the offshore investments part of the meal come into play? nt
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:38 AM
Response to Original message
26. Actually, the huge error here is our dear Dr. Kamerschen OMITTED SOCIAL SPENDING.
Edited on Sat Dec-16-06 02:06 AM by Selatius
If we omit various forms of wealth and income redistribution, then yes, his example is an accurate reflection of the remaining facts, but the reality of the matter is we would have to re-examine his example and also include back into the equation the effects of income and wealth redistribution performed by the federal government in the form of poverty relief, public works programs, job training, higher education spending, infrastructure maintenance, health care spending, etc. in order to attempt to EMULATE to some reasonable degree of accuracy how the US economy REALLY WORKS.

Also, if we cut taxes in this manner, then of course the richest man would get the most money back, which is why many Dems were against it. Dems argued the best way to stimulate the economy is to lower taxes on the poorest and leave them the same for the richest. They wanted to give tax cuts to people who really needed it instead of those who don't need it.
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 01:55 AM
Response to Reply #26
30. socialize the costs, privatize the profits.
that's their mantra.

the uber rich generally benefit from social spending as well...* did. he made the bulk of his money when the taxpayers footed the bill for the new texas rangers stadium, and made his shares WAAAAAAY more valuable.

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JohnnyRingo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 02:09 AM
Response to Original message
32. That's an old right wing trick with numbers
Edited on Sat Dec-16-06 02:34 AM by JohnnyRingo
It's done by ignoring social security taxes and counting income tax alone.

Since SS taxes are paid only on the first $85,000 earned, that 10th guy finished paying his obligation in early January while most of the others are taxed through the entire year for a much, much, higher percentage of their total income. With SS taxes included, the average worker is taxed at a much higher percentage per dollar earned.

To clarify, When SS taxes are removed, the working man's wages increase immensely, while the CEO hardly notices the difference in percentage.

Still, the wealthy want to abolish social security because at retirement they find themselves having paid the absolute maximum in SS taxes every year while still receiving the same monthly benefits as a worker who earned $26,000 per year.

They figure (correctly) that they can make their own sizable retirement investments and receive a larger stipend at the end.

I know this because Rush was caught a few years ago using this bogus comparison to gain sympathy from his working class ditto heads. (it worked)

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LostInAnomie Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 02:36 AM
Response to Original message
34. Where exactly would the victimized rich man go?
No other industrialized country has taxes anywhere near as low for the rich as the US. They spend far more in social spending and have laws that make the interests of labor far more of a concern. It's a fucking joke to say that the rich would go anywhere else. Their factories might, but they won't.

I also have a huge problem with the fact that "Dr. Kamerschen" doesn't mention the income disparity between the bottom 5 and the 10th man. Sure it looks bad when guy #5 is only paying $1 and guy #10 is paying $59 until you realize that guy #10 is making somewhere around 400x the income of #5.
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soothsayer Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 07:34 AM
Response to Original message
35. Rich guy would have 'forgotten his wallet' (always do) and besides
would have probably gotten free food from somewhere (they get all the freebies even tho they least need 'em)
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melm00se Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 08:22 AM
Response to Original message
36. along this lines
Edited on Sat Dec-16-06 08:23 AM by melm00se
righ wingers always whip out charts like this one:

Percent ranked by AGI...AGI thresholds on percentiles...Percent of the personal Federal Income tax paid
top 1%.....................$328K...............................36.89%
top 5%.....................$137K...............................57.13%
top 10%....................$99k................................68.19%
top 25%....................$60K................................84.86%
top 50%....................$30K................................96.70%
bottom 50%................<$30K................................3.3%

what is the competing/compelling comeback?
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jmowreader Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 10:37 AM
Response to Original message
38. Let's play a little
Ten men, who served on the same Patrol Boat in Vietnam, ate dinner together every Friday night. They always went to the same restaurant.

The restaurant owner was a carrier sailor in Nam, and he charged the group $100. One must now understand that the original story was some sort of right-wing bullshit fantasy, because in the real world the ten men would have each thrown ten bucks into the pot and had pizza and beer along with the kind of stories that start out "now, this is no shit." But some kid who read "Atlas Shrugged" one time too many wrote this thing, so the ten men were forced to pay their bill the way Americans pay income tax:

The first four men (the poorest) would pay nothing for a whole freshly-made pizza
The fifth would pay $1 for a mess of crawdads
The sixth would pay $3 for a chef's salad
The seventh would pay $7 for a 12-ounce sirloin and a baked potato
The eighth would pay $12 for a 16-ounce sirloin, a skewer of grilled shrimp, steak fries and ice cream for dessert
The ninth would pay $18 for a 12-ounce ribeye and a half-pound of crab legs along with a dressed baked potato and a huge salad
The tenth man (the richest) would pay $59 for a steak that looks more like a pot roast, two one-pound lobsters and about six sides.

Okay, so far so good. What they're not telling you is that the first four men work at Wal-Mart, the fifth is a schoolteacher, the sixth works at Home Depot, the seventh is a doctor still trying to pay off his college loans, the eighth is a contractor, the ninth owns the hardware store all the Home Depot associates keep sending people to when they need something Home Depot doesn't carry, and the tenth man is the mayor.

Anyway, everyone's real happy here. The four poor fuckers who work at Wal-Mart enjoy eating free, the five men in the middle find their bills to be truly reasonable and their meals satisfactory, and no one's yet figured out where the last guy is putting all the food they bring him.

Well, by the by, the restaurant owner decides to retire. The fact that the mayor eats at his place every Friday night, and everyone in town knows it, has made him rich beyond his wildest dreams. He sold the restaurant, strapped a snow shovel to the hood of his car and drove south looking for a place where no one knows what it is. The new owner, who is a chickenhawk freeper, decides that he must "do something" for the ten men to thank them for their patronage (and to keep the mayor coming in every Friday night), and cuts their bill to $80. He makes the new bills as follows:

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... the least proportionate savings)

That sounds real good until you realize that the first nine men were served hamburgers so the restaurant owner could afford to feed the mayor even more food than before. So the ten men--yes, even the mayor, who's far better off than before--approach the new owner. "We understand what you were trying to do, but we don't like it. Everything was okay the way it was when John owned this restaurant. Our meal was hugely profitable, Frank (pointing at the mayor) eating here every week increased John's business, we were happy and John was ecstatic. So we'd like you to raise our bills back to where they were." The chickenhawk freeper refused, citing the Huge Savings they all received. Said the fifth man, "what 'huge savings' are you talking about? I paid a dollar. I know schoolteachers don't get paid much, but I could afford a dollar a week. Mark (pointing at the Home Depot guy) paid $3, and now he pays $2. Frank couldn't hold everything you served him, and we didn't know that was possible. The only person who's actually saving money here is you." The freeper refused to budge.

Outside the restaurant, Frank was the first to speak. "Fuck that asshole. Pizza and beer sound good for next week, $10 per man?" Mark pointed at the pizza parlor next to the chickenhawk's restaurant. "Sounds good. Let's meet there." All agreed.

The next week, the chickenhawk's restaurant was deserted while the pizzeria next door was packed to the rafters. The chickenhawk went out of business shortly thereafter and his place was purchased by the pizza guy, who knocked a hole in the wall between the two restaurants.

And that, right-wing blowhards and Republican legislators, is how reality works. Piss off your constituents enough, and they'll put you out on your ass.

Oh yeah: Snopes reports that not only did David R. Kamerschen, Ph.D., not write the original piece, he doesn't know who did.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-16-06 10:53 AM
Response to Original message
39. What the professor leaves out are the tax loopholes available
only to the rich. The guy who pays $59 or even $49 for the meal can then write it off as an expense, charged to his business credit card where he also writes off the interest from the charge where as the middle class pays pays the whole amount with NO tax write off and the poor doesn't get to eat in the restaurant at all, they are so "lucky" they might get to eat at charity "soup kitchens" where the rich MIGHT have donated their 20 dollar savings and write that off against their taxes as a "charitable donation".

The professor really needs either a refresher on taxation and economics or he just needs to stop misleading people. I suspect he will do neither.

Oh, and the professor, if he really is a professor of economics, knows the rich already have their money invested overseas and NOT domestically so his red herring of "they will take their money and go elsewhere" is crap and ANY professor of Economics knows that.
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