Wednesday, September 28, 2005
Tuesday, September 27, 2005
Tax Systems
Tax cuts - How they really work
Sometimes Politicians can exclaim; "It's just a tax cut for the rich!",
and it is just accepted to be fact. But what does that really mean?
Just in case you are not completely clear on this issue,
we hope the following will help.
Please share this with your friends as you see fit. Tax Cuts -
A Simple Lesson In Economics This is how the cookie crumbles.
Please read it carefully.
Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for dinner.
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 $7.
The eighth $12.
The ninth $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men ate dinner in the restaurant 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 meal by $20."
So, now dinner for the ten only cost $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, the paying customers?
How could they divvy up the $20 windfall so that everyone would get
his fair share? The six men 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 their meal.
So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same proportion, 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 paid $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 eat 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 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.
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 dinner,
so the nine sat down and ate without him.
But when it came time to pay the bill,
they discovered something important. They didn't have enough money
amongst 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
at the table anymore. There are lots of good restaurants
in Europe and the Caribbean.
David R. Kamerschen, Ph.D
Distinguished Professor of Economics
536 Brooks Hall
University of Georgia
Sometimes Politicians can exclaim; "It's just a tax cut for the rich!",
and it is just accepted to be fact. But what does that really mean?
Just in case you are not completely clear on this issue,
we hope the following will help.
Please share this with your friends as you see fit. Tax Cuts -
A Simple Lesson In Economics This is how the cookie crumbles.
Please read it carefully.
Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for dinner.
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 $7.
The eighth $12.
The ninth $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men ate dinner in the restaurant 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 meal by $20."
So, now dinner for the ten only cost $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, the paying customers?
How could they divvy up the $20 windfall so that everyone would get
his fair share? The six men 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 their meal.
So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same proportion, 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 paid $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 eat 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 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.
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 dinner,
so the nine sat down and ate without him.
But when it came time to pay the bill,
they discovered something important. They didn't have enough money
amongst 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
at the table anymore. There are lots of good restaurants
in Europe and the Caribbean.
David R. Kamerschen, Ph.D
Distinguished Professor of Economics
536 Brooks Hall
University of Georgia
International Monetary Fun
BATON ROUGE, LA. - The White House announced today that President Bush has successfully sold the state of Louisiana back to the French at more than double its original selling price of $11,250,000. "This is a bold step forward for America," said Bush. "And America will be stronger and better as a result. I stand here today in unity with French Prime Minister Jack Chiraq, who was so kind as to accept my offer of Louisiana in exchange for 25 million dollars cash."
The state, ravaged by Hurricanes Katrina and Rita, will cost hundreds of billions of dollars to rebuild. "Jack understands full well that this one's a 'fixer-upper,'" said Bush. "He and the French people are quite prepared to pump out all that water, and make Louisiana a decent place to live in again. And they've got a lot of work to do. But Jack's assured me, if it's not right, they're going to fix it."
The move has been met with incredulity from the already beleaguered residents of Louisiana. However, President Bush's decision has been widely lauded by Republicans. "This is an unexpected but brilliant move by the President," said Senate Majority Leader Bill Frist. "Instead of spending billions and billions, and billions of dollars rebuilding the state of Louisiana, we've just made 25 million dollars in pure profit."
"This is indeed a smart move," commented Fox News analyst Brit Hume. "Not only have we stopped the flooding in our own budget, we've made money on the deal. Plus, when the god-awful French are done fixing it up, we can easily invade and take it back again."
The money gained from 'The Louisiana Refund' is expected to be immediately pumped back into the rebuilding of Iraq.
Thursday, September 22, 2005
A MORAL QUESTION
This test only has one question, but it's a very important one. By
giving an honest answer, you will discover where you stand
morally. The test features an unlikely, completely fictional situation
in which you will have to make a decision.
Remember that your answer needs to be honest, yet
spontaneous. Please scroll down slowly and give due consideration to
each line.
===============================================
THE SITUATION
You are in Florida, Miami to be specific. There is chaos all around you
caused by a hurricane with severe flooding. This is a flood of biblical
proportions. You are a photojournalist working for a major newspaper,
and you're caught in the middle of this epic disaster.
The situation is nearly hopeless. You're trying to shoot
career-making photos. There are houses and people swirling
around you, some disappearing under the water.
Nature is unleashing all of its destructive fury.
===============================================
THE TEST
Suddenly you see a man in the water. He is fighting for
his life, trying not to be taken down with the debris. You
move closer. Somehow the man looks familiar. You suddenly realize who
it is. It's George W. Bush!
At the same time you notice that the raging waters are
about to take him under forever. You have two options--you
can save the life of GeorgeW.Bush, or you can shoot a dramatic
Pulitzer Prize-winning photo, documenting the death of one of the
world's most powerful politicians.
===============================================
THE QUESTION
Here's the question, and please give an honest answer:
Would you select high contrast color film, or would you go with the
classic simplicity of black and white?
giving an honest answer, you will discover where you stand
morally. The test features an unlikely, completely fictional situation
in which you will have to make a decision.
Remember that your answer needs to be honest, yet
spontaneous. Please scroll down slowly and give due consideration to
each line.
===============================================
THE SITUATION
You are in Florida, Miami to be specific. There is chaos all around you
caused by a hurricane with severe flooding. This is a flood of biblical
proportions. You are a photojournalist working for a major newspaper,
and you're caught in the middle of this epic disaster.
The situation is nearly hopeless. You're trying to shoot
career-making photos. There are houses and people swirling
around you, some disappearing under the water.
Nature is unleashing all of its destructive fury.
===============================================
THE TEST
Suddenly you see a man in the water. He is fighting for
his life, trying not to be taken down with the debris. You
move closer. Somehow the man looks familiar. You suddenly realize who
it is. It's George W. Bush!
At the same time you notice that the raging waters are
about to take him under forever. You have two options--you
can save the life of GeorgeW.Bush, or you can shoot a dramatic
Pulitzer Prize-winning photo, documenting the death of one of the
world's most powerful politicians.
===============================================
THE QUESTION
Here's the question, and please give an honest answer:
Would you select high contrast color film, or would you go with the
classic simplicity of black and white?
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