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Articles: Education/Training | Tax Laws
- Prof. 00782 Maverick
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And so:
*The first four men (the poorest) would still pay nothing.
*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 pay $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 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 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 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 drinking overseas where the atmosphere is somewhat friendlier.
- David R. Kamerschen, PhD
Professor of Economics
University of Georgia
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