April 17, 2007

Tax Code Simplified

Since today is Wealth Confiscation Tax Day in the United States, I thought I would post this explanation of our tax code that has been sent to me by many readers.

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 on 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!"

"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.

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

In the real world of "Bush" tax cuts the advantage to the rich is even less than the above example. The government never cuts the bar tab or the tax bill by 20% and the rich saw the top tax bracket drop from 39% to 37% resulting in a 5% savings or about $3 not the $10 in the bar example. Likewise the lowest income bar patrons DID get plenty. They got an increase in the earned income child care credit from $600 to $1000 even though they pay zero taxes. Those in the lowest tax paying bracket saw the rate drop from 15% to 10 % resulting in a 33% reduction in taxes. But if you are a Journalist, this does not fit the liberal media template, so the headline reads "BUSH TAX CUT FAVOR THE RICH"!!


Now back to me. Another way the LSM demonizes the eeevil rich is in talking about their tax refunds. For example, last year Dick Cheney got a big refund. Teresa Big Boobs, who used to comment on this site, went ballistic. How could Cheney get such a huge refund? It's unfair. Now I and several readers tried to explain to her that the reason he got such a huge refund was because he had overpaid his taxes. Now Teresa is a liberal. No matter how we tried to explain this to her she still clung to her beliefs that Cheney's tax refund was unfair. And that's just what the LSM was trying to do. In the headline was the amount of his tax refund. Far down in the story was how much he actually paid, and it was a signifucant amount.

Here's the deal. Americans are stupid when it comes to taxes. Boortz usually writes about this on Gummint bloodsucking Tax Day. Ask the average American how much he pays in taxes and the reply will usually be, "I didn't pay anything. I got money back."

And that's the beauty of the withholding system. Americans don't
realize how much they actually pay. The withholding system was a "temporary" system to help fund WWII. As with most "temporary" gummint programs, it somehow became permanent. See the telephone tax to fund the Spanish American War that was finally stopped this year.

Because I'm a SRF© with investment income, I have to play quarterly estimated taxes. Here's what pisses me off. If I underestimate my taxes by a certain amount and have to write a check to the gummint on You're Fucked Tax Day, there is a good chance I will have to pay a penalty for not giving the gummint enough money during the year. If I overestimate, they don't give me interest on the loan I give them. Assholes!

Oh. And one more thing. You know how all those liberals want to withhold the part of their taxes that go to the military because they're anti-war? Fine. I'm anti-welfare. Can I withhold the part of my taxes that go to support parasites? I didn't think so.

Update: Here is a story about Cheney's refund last year. You may notice that nowhere in the article does it say how much the Cheney's actually paid in taxes. After all, this is National Proletariat Radio. Biased media? Nah. Maybe Andrea Seabrook is just an idiot. You can also tell who the liberal commenters are since they sound exactly like Teresa Big Boobs.

By the way, I'll be willing to bet the Cheney's gave more to charity than the Clintons, the Gores, The Edwards, Ted Kennedy, and the Kerrys. It turns out that the red states are far more charitable with their own money than the blue states. The blue states are charitable with other people's money.

Posted by denny at April 17, 2007 01:15 PM  
Comments

Denny....

Excellant presentation but you are preaching to the choir....probably to complicated for the average voter/taxpayer/citizen/secret immigrant or whatever.

Your statement about how much one pays in taxes hit close to home , I overpaid my quarterly robber baron quota & recieved a significant tax refund though I did pay substantial actual taxes... my wife who should know better told everybody we did not have to pay any taxes this year because now that we were both 65 the taxman gave everything back to us. Would not this really be nice if only true.

It is amazing that when the company I once worked for forced 33 of we middle management people to accept early retirement ....no one cared!.... Now that my part time business has prospered, everybody is concerned that I somehow got a free ride....(refund for an overpayment of my own money) Stupid Bast--rds!

I would really like to see a flat percentage tax assessment with no deductions, or even better this flat tax & no employer withholding at all, just a quarterly bill to each & every taxpayer. The shock value would be enormous, the uproar would be tremendous.

Posted by: dudley1 on April 17, 2007 02:43 PM

I'm pretty sure the Cheney's had to pony up to the tune of $1.6 million. I remember seeing a very small blip about it on one of the cable news shows.

Posted by: Tina on April 17, 2007 03:04 PM

Oops! I was wrong. The 1.6 was their taxable income.

Posted by: Tina on April 17, 2007 05:22 PM

See the telephone tax to fund the Spanish American War that was finally stopped this year.

I had no idea that's what that was about ... Jeez Louise!

Posted by: Peggy U on April 17, 2007 06:05 PM

Penalized 21$ for underestimating taxes for last year.
Sent forms and check in today, but that penalty "burns me more" than the money I owed. Fuck all the liberals and ethnic "wastes of life" sucking on our tit!

Posted by: dirtyPedro on April 17, 2007 06:14 PM

And don't forget the dummycraps are promising a tax increase that will dwarf Slick Willie's record $240 billion tax increase- they're talking well over $400 billion, and increasing EVERYONES' taxes, even those who were taken of the tax rolls with GWB's tax cuts- the poorest Americans.
Yeah, the libs really care about the poor- Keeping them poor and dependent upon them while making the rest of us poorer to fund their socialist utopian bullshit...

Posted by: Rob Cooper on April 17, 2007 07:09 PM

Right on Denny. Does the following from a history of Rome strike a note. And don’t forget bread, circuses and taxes. (Welfare, entertainment and increasing taxes to pay for it.)

“One of the most pressing problems was the decline in the number of small landowners, whose spirit had made Rome great. Burdened by frequent military service, their farm buildings destroyed by Hannibal, and unable to compete with the cheap grain imported from the new Roman province of Sicily, small farmers sold out and moved to Rome. Here they joined the unemployed, discontented proletariat, so-called because their only contribution was proles, "children." The proletariat comprised a majority of the citizens in the city.”

Posted by: Art on April 17, 2007 07:27 PM

You said it, Bro. HATE payin that estimated tax to avoid "underpayment penalty." I've seen about 3 versions of that story 'bout the guys payin the bill. I like the one about the tickets for the rained-out ball game.

Here's another related exemplum which some may not yet have heard:

A girl was about to finish her first year of college. She considered herself to be a liberal Democrat but her father was a staunch Republican.

One day she was challenging him on his beliefs and his opposition to taxes and welfare programs. He stopped her and asked her how she was doing in school.

She answered that she had a 4.0 GPA but it was really tough. She had to study all the time, and she never had time to go out and party. She had no time for a boyfriend and only a few friends because of spending all her time studying.

He asked, "How is your friend Mary?" She replied that Mary was barely getting by. She had a 2.0 GPA and never studied. She was very popular on campus and went to parties all the time. She often didn't show up for classes because she was
hung over.

Dad then asked his daughter why she didn't go to the Dean's office and have 1.0 taken off her 4.0 and give it to her friend with the 2.0. That way they would both have a 3.0 GPA.

The daughter angrily fired back, "That wouldn't be fair! I worked really hard for mine and Mary has done nothing."

The father slowly smiled and said, "Welcome to the
Republican Party."

Posted by: eros total on April 17, 2007 07:28 PM

If witholding was done away with, there would be a tax revolt the likes of which has never been seen before!

Posted by: Alan on April 17, 2007 08:53 PM

The self employed get hit hard unless they form a corporation and pay themselves a salary. That 15 percent off the top in self employment tax ( Social security and medicare )is bad enough but then one is taxed on that fifteen percent for income purposes.

I figure that if I live to be about 77 I will get even on the payroll taxes and social security that I paid.

Posted by: GUYK on April 17, 2007 09:20 PM

White House Press Release:
Vice President and Mrs. Cheney filed their federal income tax return for 2006 today. The income tax return shows that the Cheneys owe federal taxes for 2006 of $413,326 on taxable income of $1,614,862. During the course of 2006 the Cheneys paid $464,789 in taxes through withholding and estimated tax payments. The Cheneys elected to apply the resulting $51,463 tax overpayment to their 2007 estimated tax payments. The wage and salary income reported on the tax return includes the Vice President's $208,575 government salary. In addition, the tax return reports a pension benefit of $27,500, which the Vice President received as a former director of Union Pacific Corporation. The Vice President became eligible for this benefit in 2006 when he turned 65. The tax return also reports Mrs. Cheney's book royalty income, which includes a partial royalty advance on a book she is writing about growing up in Wyoming. It also reports wage and salary income from her continuing work at the American Enterprise Institute and a pension benefit of $32,000, which she received as a former director of Reader's Digest. The amounts of the pension benefits received by the Vice President and by Mrs. Cheney are fixed and will not increase or decrease based on changes in the earnings or revenues of either company.

The Cheneys donated $104,425 to charity in 2006. This brings the Cheneys' total charitable contributions during his Vice Presidency to $7,800,019.

Posted by: Michelle on April 18, 2007 06:34 AM

Peggy U....

See, your Federal Tax dollars do work....The Spanish American War is over...Fidel Castro won!

Posted by: dudley1 on April 18, 2007 06:49 AM

...and then, didn't Fidel create the telecommunication entity known as "Taco Bell"!

Posted by: dirtyPedro on April 18, 2007 10:29 AM

Yes GUYK being self-employed SUCKS around tax time. I did not do to bad this year and I turned in four 1099's. Thank jebus for kids. I only owed $1245 But you can't beat it the rest of the year. Hell it's 82 and sunny outside, I'm going fishin!

Posted by: kerrcarto on April 18, 2007 02:52 PM

I think Fidel has assumed room temperature. They have been afraid to announce it.

Posted by: vetfromhell on April 18, 2007 02:52 PM

Don't forget the Alternative Minimum Beer Tab. Cost me dearly this year.

Posted by: marcel on April 18, 2007 03:33 PM

Yeppers, I'm an employee of our Company, at this tax rate, my son makes more than I do with hazard pay. Thing is, all my pay goes for shopping and shipping his shit to Guambodia...I love my crazy life. They can't take that from me yet. (?)

Posted by: LisaKay on April 20, 2007 04:47 AM

The bar tab analogy, while instructive, is in error. The 4 bar patrons that paid nothing should really receive a buck or two for just showing up. . . at the expense of the richest guy. Haven't you all heard of the Earned Income Credit? Just another technique to buy votes and redistribute wealth.

Posted by: macheon on April 21, 2007 11:57 PM
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