From: Sun Herald Letters

To: Armond "Si" Simmons

Sent: Tuesday, February 11, 2003 11:02 AM

Subject: Re: Letters

Dear Mr. Simmons:
We ran the tax parable in our editorial of January 21.
Marie Harris
The Sun Herald


Parable explains
one approach
to cutting taxes

For months, an interesting, anonymous parable about the burden of taxation has been circulating on the Internet. Newspapers around the country report that some readers have submitted it as a letter to the editor. It goes like this:

Here's an easy-to-understand example of the current tax law and the president's proposed tax cuts.
Suppose every day ten people go out for dinner, and the total bill comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
-- The first four people --- the poorest --- would pay nothing.
-- The fifth person would pay $1.
-- The sixth $3.
-- The seventh $7.
-- The eighth $12.
-- The ninth $18.
-- And the tenth person --- the richest --- would pay $59.
That's what they decided to do, and they ate dinner in the restaurant every day and seemed quite happy with the arrangement.
Then one day the owner threw them a curve. "Since you're such good customers," he said, "I'm going to reduce the cost of your meal by $20, so your dinner will now cost only $80."
The owner suggested it would be fair to reduce each person's bill, and he proceeded to work out the amounts each should pay. And so:
-- The fifth person would now pay nothing.
-- The sixth $2.
-- The seventh $5.
-- The eighth $9.
-- The ninth $12.
-- And the tenth person would have a bill of $52 instead of his earlier $59.
Each of the six was better off than before, and the first four continued to eat for free.
Once outside the restaurant, however, the people began to compare their savings.
"I only got a dollar out of the $20" declared the sixth person as she pointed to the tenth, "but he got $7!"
"Yeah, that's right," exclaimed the fifth person. "I only saved a dollar, too. It's unfair that he got seven times more than me!"
"That's true!" shouted another. "Why should he get $7 back when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four people in unison. "We didn't get anything at all. The system exploits the poor!"
The nine people surrounded the tenth and beat him up. The next night he 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 were $52 short!
And that's how the 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 at the table anymore.


on 2/10/03 11:20 AM, Armond "Si" Simmons at psysim@coosahs.net wrote:

Well, it's that time of year again when at least some attempt should be made to explain why you and I are not getting a tax cut, and hopefully reveal how the slick politicians will again try and pull that same "tax cut flimflam" on us, telling us that we're owed tax cuts that we're not, getting us all fired up, and all in order to trick us and steal our almighty vote.


This is a VERY simple way to understand the tax laws.

Let¹s put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. 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 $7, the eighth $12, the ninth $18, and the tenth man‹the richest‹would pay $59.

That¹s 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.

(in tax language­ a tax cut!).

³Since you are all such good customers,² he said, "I¹m going to cut the cost of your daily meal by $20." So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected as they hadn't paid anything  -  so nothing to cut. They would still eat for free. But what about the other six ­ the paying customers? How could they divvy up the $20 windfall so that everyone would get his ³fair share?²

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody¹s share, then the fifth man, who'd been paying $1  and the sixth man, who'd been paying $3 would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man¹s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. 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. ³I only got a dollar out of the $20,² declared the sixth man, but he, pointing to the tenth. ³But he got $7!² "Yeah, that¹s right," exclaimed the fifth man, ³I only saved a dollar too, It¹s unfair that he got seven times more than me!²

³That¹s true!² shouted the seventh man, "Why should he get $7 back when I got only $2? The wealthy get all the breaks!." ³Wait a minute,² yelled the first four men in unison, "We didn¹t get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night he didn¹t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill!

And that, boys and girls, journalists and college instructors, is how the 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 at the table anymore.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!

Armond "Si" Simmons
Pell City, AL 35128

104 Wadsworth Lane
205 338 7378
psysim@coosahs.net
http://psysim.www7.50megs.com/html/dustoff.htm