Food for thought - distribution of wealth

I am voting for Obama, but this is food for thought:


Suppose that every day, ten men go out for beer 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 drank in the bar 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 beer by $20.’ Drinks 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 drink 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 drink his beer. So, the bar 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 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 got’

‘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, ladies and gentlemen, 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.
3b/c
You forgot about the tax loopholes for the uber-rich. That last man didn't pay anywhere close to $59 for his beer, if at all. And it's questionable whether the 8th and 9th paid that much either. Only the little people pay taxes. So the guys in the middle paid most or all of the beer tab.

If people want to b1tch about our progressive income tax system, that's a totally different topic from what Obama wants to do with tax cuts. I'm in total agreement that charging progressively more as people earn more is unfair, but that's the way our tax code has been for many decades. It's time for an overhaul, but that doesn't mean it's Obama's fault.
This always pops up and I think it's way oversimplified. I have never refused a pay raise because it meant getting bumped up into a higher tax bracket. I still make more after the pay raise and if I do want to avoid taxes, I just put my money into a tax exempt investment account (401K, etc.)

I found this and think it can apply to the the story as well:

One other thing our Economist forgot to account for are the relative benefits of being Rich.

The First four men lived in shacks.
The fifth man rented a small apartment
the Sixth man rented a larger apartment
the Seventh man owned a condominium
the Eigth man owned a small house
the Ninth man owned a large house
the Tenth man, the wealthiest, owned a Mansion, two vacation houses, all with pools and other benefits, German and Italian cars, his business, shares in other peoples business and a couple of Senators and Congressmen.

It's also a simplified example, but it broadens the picture a bit.
Some of the first four men who live in shacks don't want to work. I have some of them in my own family.

Some of the rich (who maybe do have tax loop holes) also are many of the people who start businesses and create the jobs that you and I have. I for one am glad they are out there. I'm not talking about the CEO's who rip off their companies; I'm talking about the man who lives in my town and yours who starts a tool and die shop, restaurant, etc., which in turn creates jobs.
3b/c
Isn't the tax increase for the money that is over $250,000? So, in other words, if someone made $275,000, then the increase would be for the $25,000 over the $250,000. Am I right?
So, it's not like someone who is making $250,000 is going to pay an equal amount as someone who is a millionaire...most of their taxes is still going to be what those of us are paying.

I used to get emails like the one with the beer example, but it's usually about going out to eat and paying for the meal.
However, the beer or the meal isn't being distributed evenly. It isn't like everyone is getting equal opportunity and equal piece of the pie. So, it's way more complicated than the example you presented.

Also, think of the rich guys having coupons that offset much of their expenses and that they order dessert too.

I agree, it's the middle class that's being screwed with the taxes we have now. And if you're against welfare, shouldn't you be against corporate welfare?

I'm not a religious person, but I like "what you do to the least of these you do to me." Has our greed gotten so bad that we want to give our society which has given us a chance to accumulate that wealth, the big ol' F you?!? I hope not.

Did you hear that even after the bail out the executives and CEO's of many major institutions are still getting million+ dollar bonuses and pay raises? Are you joking? After being bailed out? After screwing over your own stockholders? After screwing over the tax payers? After hurting our economy?

The reality is much different than the over-simplified example you've given. I'm all for making profits and doing well economically. I'm not against rich people. But it needs to be done ethically and legally!!!!
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3a/3b
Well, the answer is easy--they just need to go to the liquor store, buy two six packs and head to someone's house instead of going out to a bar.

My point was that this extremely oversimplified way to explain how taxes are unfair. Unlike taxes, costs of living aren't pro-rated for those making less. Essentials--groceries, gas, childcare, etc. are going to take a bigger chunk out of the poor person's overall income than they would for a wealthier person. There has to be some kind of balance so everyone has an opportunity to do well.
We are one of the small businesses that generate the opportunity for other people to make some money. We do contract out some of the work we don't do.

The mortgage stuff has already affected us...we had a client that was making arrangements for a line of equity..but since the value of his house has gone down, he couldn't get what he wanted...so the job is off indefinitely. $75K job...so that immediately removed income from us and income from the people we were going to send stuff to, the vendors we would purchase from, etc. So that has a trickle down effect. We already cut expenses to the bone and now we have to try to do it more while we look for something to fill that time slot and income.

If you can tell me why we need to hustle up and get more business instead of just waiting for someone else to give us money? And why should we bother to generate more income if it is going to be taken away and given to someone else who hasn't bothered to work as long and hard as we have to make a comfortable living?

Why is that fair?
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We are one of the small businesses that generate the opportunity for other people to make some money. We do contract out some of the work we don't do.

The mortgage stuff has already affected us...we had a client that was making arrangements for a line of equity..but since the value of his house has gone down, he couldn't get what he wanted...so the job is off indefinitely. $75K job...so that immediately removed income from us and income from the people we were going to send stuff to, the vendors we would purchase from, etc. So that has a trickle down effect. We already cut expenses to the bone and now we have to try to do it more while we look for something to fill that time slot and income.

If you can tell me why we need to hustle up and get more business instead of just waiting for someone else to give us money? And why should we bother to generate more income if it is going to be taken away and given to someone else who hasn't bothered to work as long and hard as we have to make a comfortable living?

Why is that fair?
Originally Posted by susancnw

We have always had a graduated tax system. It's always been that people who earn more pay a higher level of taxes, and low-wage earners get an Earned Income Credit (EIC) on their taxes (notice it says "earned", meaning people have to earn wages and pay taxes to get the credit). Why are you blaming the current system on Obama? You are losing money right now, and Obama isn't in office (yet). Seems like you are confusing things.
I don't think anything's fair, or ever will be. There will always be people complaining, no matter if they are rich or poor. I think the tax system is very complex and will never work to please everyone.

But as far as keeping all the money you earn, that seems sensible- why give it all away? But what about those people in our society that are old, disabled, sick, orphaned, or are stuck in a hole they can't get out of? If I was rich, I would have no problem helping out people that are less fortunate than me. I could never be happy living the high life while some people are just left to die. That's just the way I feel. Some people may say - Oh, those people don't feel like working or just want handouts. Why should we give our hard-earned money to those people? I agree. There should be limits. And there are. It is a lot harder to get welfare than people think. In the 80's and early 90's, it was really easy. But times have changed. People are questioned. They aren't allowed to sit around and collect money (unless they are one of the above- old, disabled, sick, orphaned, etc.) Of course there are going to be a few people that slide through that are perfectly able to work. But should we deny everyone a chance at living a decent life because a few people f**** it up for everyone that deserves it? Do we really want to be a pure capitalist country that is only out for ourselves? I think it is fine if we are part capitalist and part socialist. This way, people have an opportunity to rise to the top, but we also don't leave the unfortunate in the dust. We extend our hand, pull them up, and give them the opportunity we were given. That's what I call humanity.
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I've got family members and friends that are disabled. But with the government's increasingly heavy interference, the family is breaking down.

We used to take care of our own. Families took care of their elderly, infirm and disabled. They knew the government was not going to do it, so they stepped up and did it themselves. Churches helped also. The more the government steps in and interferes, the more people step back and renege on their responsibilities. I think the black community has been absolutely devastated by socialism and handouts. So has the white community, but not to the same extent. When I was growing up, I remember many black families that I knew were very strong, proud families. They worked hard, took care of their 'own' (as in elderly, disabled, etc.), so did the white families. They didn't expect someone else to do it, they did it as they were family! My aunt pretty much abandoned her daughter when they were young and my grandparents raised them. My aunt went from loser husband to loser husband to loser boyfriend to abusive, controlling same sex relationship to homeless. She refused to let anyone help her, but we didn't let her children suffer. My older sister's pride led to her losing custody of her daughter...by the time my parents knew what was going on, the situation was settled and my sister has regretted it for decades. She knows her pride allowed a lot of pain and damage.

The government doesn't need to step up in all situations and become the surrogate parent/nanny...we need to take back our own.
My son wears combat boots (and a parachute).
The older I get, the less patience I have with cleverness. Thomas Sowell.
Resolve to perform what you ought. Perform without fail what you resolve. Benjamin Franklin.
Don't go around saying the world owes you a living. The world owes you nothing. It was here first. Mark Twain.



Why does it seem that the people who make it a point to say that they nor their views are racists, tend to bring up race in threads - like say this one - that have nothing to do with race?
EXACTLY! I never refused a pay raise bc I was bumped into a higher tax bracket b/c in the end I still saw a significant increase in my check AFTER taxes!

And what is so wrong about reexamining the current tax policy and setup and challenging it to make it current? What may have been relevant then may not apply now based on how our economy has changed.

This always pops up and I think it's way oversimplified. I have never refused a pay raise because it meant getting bumped up into a higher tax bracket. I still make more after the pay raise and if I do want to avoid taxes, I just put my money into a tax exempt investment account (401K, etc.)

I found this and think it can apply to the the story as well:

One other thing our Economist forgot to account for are the relative benefits of being Rich.

The First four men lived in shacks.
The fifth man rented a small apartment
the Sixth man rented a larger apartment
the Seventh man owned a condominium
the Eigth man owned a small house
the Ninth man owned a large house
the Tenth man, the wealthiest, owned a Mansion, two vacation houses, all with pools and other benefits, German and Italian cars, his business, shares in other peoples business and a couple of Senators and Congressmen.

It's also a simplified example, but it broadens the picture a bit.
Originally Posted by gemini
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Susan your post is highly ignorant and offensive. Black people DO take care of their own. Black people have been devastated by handouts? Are you serious? As if the majority of black people do not get up, go to work, face RACISM daily, earn a living to take care of their nuclear and extended families?

Your silly post disgusts me.

I've got family members and friends that are disabled. But with the government's increasingly heavy interference, the family is breaking down.

We used to take care of our own. Families took care of their elderly, infirm and disabled. They knew the government was not going to do it, so they stepped up and did it themselves. Churches helped also. The more the government steps in and interferes, the more people step back and renege on their responsibilities. I think the black community has been absolutely devastated by socialism and handouts. So has the white community, but not to the same extent. When I was growing up, I remember many black families that I knew were very strong, proud families. They worked hard, took care of their 'own' (as in elderly, disabled, etc.), so did the white families. They didn't expect someone else to do it, they did it as they were family! My aunt pretty much abandoned her daughter when they were young and my grandparents raised them. My aunt went from loser husband to loser husband to loser boyfriend to abusive, controlling same sex relationship to homeless. She refused to let anyone help her, but we didn't let her children suffer. My older sister's pride led to her losing custody of her daughter...by the time my parents knew what was going on, the situation was settled and my sister has regretted it for decades. She knows her pride allowed a lot of pain and damage.

The government doesn't need to step up in all situations and become the surrogate parent/nanny...we need to take back our own.
Originally Posted by susancnw
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You are a joke. There are people out here working longer and harder than you paying higher taxes which allow you to afford to ride on repaired roads their HIGHER TAXES pay more for. You enjoy a public school for your children which their higher taxes paid more for and their higher taxes contributed to healthcare for the indigent or disabled which prevented YOUR INSURANCE company from raising your premiums b/c they have less medical services to write off.


If you can tell me why we need to hustle up and get more business instead of just waiting for someone else to give us money? And why should we bother to generate more income if it is going to be taken away and given to someone else who hasn't bothered to work as long and hard as we have to make a comfortable living?

Why is that fair?
Originally Posted by susancnw
I am a 3c/4a with medium/fine strands
No strict haircare regimen - trying my hand at the Curly Girl Method.

Fitness Blog: http://femmefitalefitclub.com/
Check out the Femme Fitale Facebook page: facebook.com/FemmeFitaleFitness
Why does it seem that the people who make it a point to say that they nor their views are racists, tend to bring up race in threads - like say this one - that have nothing to do with race?
Originally Posted by Myradella3
Either I am not reading the responses close enough or I missed where this thread became racist. I am caucasian and never once pointed the finger at any race. Maybe I was pointing a finger at lazy people regardless of color. All I am trying to point out, and I do firmly feel this way, is that I am very grateful for those people who take the risks, start businesses, and provide jobs for people like you and me. I am not talking about the CEO who is ripping off everyone; simply the hard working person who is risking losing everything to get ahead and at the same time providing something for you and me. I don't have the initiative or intelligence to be one of them, but I am ever so grateful that they are out there. I just don't want to see them all get disgusted and as "my simplified example" said, go overseas.
3b/c
Why does it seem that the people who make it a point to say that they nor their views are racists, tend to bring up race in threads - like say this one - that have nothing to do with race?
Originally Posted by Myradella3
Either I am not reading the responses close enough or I missed where this thread became racist. I am caucasian and never once pointed the finger at any race. Maybe I was pointing a finger at lazy people regardless of color. All I am trying to point out, and I do firmly feel this way, is that I am very grateful for those people who take the risks, start businesses, and provide jobs for people like you and me. I am not talking about the CEO who is ripping off everyone; simply the hard working person who is risking losing everything to get ahead and at the same time providing something for you and me. I don't have the initiative or intelligence to be one of them, but I am ever so grateful that they are out there. I just don't want to see them all get disgusted and as "my simplified example" said, go overseas.
Originally Posted by munchkin
I missed it too. In some ways I agree--families are not as tight as they used to be. Even some of immigrants who come to this country bond together until they all succeed (I realize this is a huge generalization). I also think it is idealistic to expect people to keep all of their income and have faith that the money will "trickle down." There is only so much that's going to be spent, the wealthy will likely invest their money to make MORE money to care for themselves and their families, not give it to programs that help the poor. I know that is a pessimistic, negative slant, but in all honesty, if I got to keep my entire income, most of it would stay in my hands. I accept my salary while doing the math that so much goes to taxes before I see my paycheck. I pay taxes knowing that this is what comes with living in our country. I also benefitted hugely from taxes, which paid my entire college education at a service academy as well as the salary I received in the Army.
Why does it seem that the people who make it a point to say that they nor their views are racists, tend to bring up race in threads - like say this one - that have nothing to do with race?
Originally Posted by Myradella3
Either I am not reading the responses close enough or I missed where this thread became racist.
Originally Posted by munchkin

I'm fairly certain Myradella was referring to the person in this thread who did bring up race, who she posted immediately after. Someone who has a history of drawing a line between races.
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Stolen.
Why does it seem that the people who make it a point to say that they nor their views are racists, tend to bring up race in threads - like say this one - that have nothing to do with race?
Originally Posted by Myradella3
Either I am not reading the responses close enough or I missed where this thread became racist.
Originally Posted by munchkin

I'm fairly certain Myradella was referring to the person in this thread who did bring up race, who she posted immediately after. Someone who has a history of drawing a line between races.
Originally Posted by MichelleBFT
I re-read her post (I tend to skim susan's ) but I don't see the racism. Maybe just knowing her usual perspective from other posts set people off, but I didn't see it in this one.
I've got family members and friends that are disabled. But with the government's increasingly heavy interference, the family is breaking down.

We used to take care of our own. Families took care of their elderly, infirm and disabled. They knew the government was not going to do it, so they stepped up and did it themselves. Churches helped also. The more the government steps in and interferes, the more people step back and renege on their responsibilities. I think the black community has been absolutely devastated by socialism and handouts. So has the white community, but not to the same extent. When I was growing up, I remember many black families that I knew were very strong, proud families. They worked hard, took care of their 'own' (as in elderly, disabled, etc.), so did the white families. They didn't expect someone else to do it, they did it as they were family! My aunt pretty much abandoned her daughter when they were young and my grandparents raised them. My aunt went from loser husband to loser husband to loser boyfriend to abusive, controlling same sex relationship to homeless. She refused to let anyone help her, but we didn't let her children suffer. My older sister's pride led to her losing custody of her daughter...by the time my parents knew what was going on, the situation was settled and my sister has regretted it for decades. She knows her pride allowed a lot of pain and damage.

The government doesn't need to step up in all situations and become the surrogate parent/nanny...we need to take back our own.
Originally Posted by susancnw
We do need to take back our own. Obama's plan of Socialism is not what we need. Face it people, IT'S SOCIALISM!
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We do need to take back our own. Obama's plan of Socialism is not what we need. Face it people, IT'S SOCIALISM!
Originally Posted by notegal
And what about those who have none to belong to, none to look after them? People in general are complex. It sounds good to "look after our own", but the flaw is in human nature. So do you have a proposition to fix everyone, or are you so concerned with "your own" that everyone else's "own" doesn't matter? Some socialism IS what we need... If not, give back the medicaid, and social security, and free lunch in schools, and public school, and Financial Aid for college, and.... give it all back. If you disagree with socialism so much, don't accept anything you didn't earn, including the insurance your job offers since you don't pay 100% of the premium. Oh yes, that would be a form of socialism.
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