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Suppose that every day, ten men go out

for burgers 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 every day and seemed quite
happy with the arrangement, until one day, the owner threw
them a curve ball. "Since you are all such good customers,"
he said, "I'm going to reduce the cost of your daily burgers by
$20".  Burgers for the ten men would 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 ? 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 his burger.  So, the owner
suggested that it would be fair to reduce each man's bill by
a higher percentage the poorer he was, to follow the
principle of the tax system they had been using, and he
proceeded to work out the amounts he suggested that each
should now pay.

 

And so the fifth man, like the first
four, now paid nothing (100% saving).  The sixth now paid
$2 instead of $3 (33% saving).  The seventh now paid $5
instead of $7 (28% saving).  The eighth now paid $9 instead
of $12 (25% saving).  The ninth now paid $14 instead
of $18 (22% saving).  The tenth now paid $49 instead of
$59 (16% saving).  Each of the six was better off than
before.

 

And the first four continued to eat for free. But,
once outside the cafe, the men began to compare their
savings.  "I only got a dollar out of the $20 saving,"
declared the sixth man. He pointed to the tenth man,
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 benefit than me!"  "That's true!" shouted the
seventh man. "Why should he get $10 back, when I got only
$2?  The wealthy get all the breaks!"   "Wait a minute,"
yelled the first four men in unison, "we didn't get anything
at all. This new tax system exploits the poor!"

 

The nine men surrounded the tenth and beat him up.

 

The nextnight the tenth man didn't show up for burgers so the nine
sat down and had their burgers 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 government ministers, is how our tax system works. The
people who already pay the highest taxes will naturally 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.

 

For those who understand, no explanation is needed.  For those who do not
understand, no explanation is possible