Tax Cut for the Rich

Suppose that ten people go together to a local Dallas restaurant for lunch every day at noon. The total bill for all ten comes to $100. If it was paid like our Federal Income Taxes are paid, the first four people would pay nothing; the fifth would pay $1; the sixth would pay $2; the seventh $5; the eighth $8; the ninth $18. The tenth person (obviously the richest) would pay $66. (This information alone should shock you, but it matches what happens with our actual income taxes as of the year 2000 tax tables.)

The ten people ate lunch in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. "Since you are such good customers," he said, "I'm going to reduce the cost of your daily meal by $20. Now lunch for the ten only costs $80!

Oh, but what should they do with this "extra" money that would be "fair"? The first four should be unaffected; they still eat for free. Can we figure out how to divvy up the $20 savings among the remaining six so that everyone gets their fair share? The people realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth person and the sixth person would end up being paid to eat their meal, and this will surely not be acceptable to the rest. (Actually the current "Income Tax Credit" for low income workers gives them back more money than they contributed!!!!} The restaurant 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 person paid nothing, the sixth person paid nothing, the seventh paid $2, the eighth paid $5, the ninth paid $15, leaving the tenth person with a bill of $58 instead of $66. Outside the restaurant, the people began to compare their savings.

"I only got $2 out the $20," declared the sixth person pointing to the tenth, "and they got $8!"

"Yeah, that's right!" exclaimed the fifth person. "I only saved a dollar, too. It's unfair that they got eight times more than I did!"

"That's true!" shouted the seventh person. "Why should he get $8 back when I got only $3? The wealthy get all the breaks!"

"Wait a minute!" yelled the first four people in unison. "We didn't get anything at all! This system exploits the poor!!!!!"

The nine people surrounded the tenth and beat him up. The next day the tenth person didn't show up for lunch, so the nine sat down and ate without him. Besides, now they did not really want his company anyway. But when it came time to pay the bill, they discovered something important—they were $58 short!

Remember there are plenty of nice restaurants in Barbados, Mexico, the Bahamas, and Switzerland not just in Dallas. Remember this story the next time a politician decides to KEEP YOUR MONEY!