Exploiting the rich

[beemanbeme]

Subject: FW: Explanation of tax cuts - Short Refresher Course



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>
> Sometimes politicians, journalists and others exclaim; "It's just a
> tax cut for the rich!" and that is just accepted to be fact, without
> question. But what does that really mean? Just in case you are not
> completely clear on this issue, the following might help.
>
> Let's put tax cuts in terms everyone can understand. Suppose that
> every day, ten men go out for beer, drink the same amount, 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 ma n (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 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 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
> b eing 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
> CLEAR EXPLANATION OF TAX CUTS
>
>
>
> ___

[dukkillr]

Great post, but you'll bring a bunch of crazy talk out of the woodwork now.  Expect semi-fictional words, semi-legit citations to semi-crazy websites, and semi-correct theories on tax law that are not even remotely based in reality. 

[Heavy C]

A buddy of mine sent that to me a couple of weeks ago.  I thought is was great then and still do.  I just never got around to posting it here.

[Dusty Miller]

Isn't it strange that getting rich is a part of the American dream, yet when people do get rich the rest of us want to turn on them like a pack of wolves?

[dukkillr]

Do you think people are too stupid to understand your analogy is wrong?  I didn't say anything about the car one and now you try the same thing.  Paying more for a better product has nothing to do with tax structure. 

[jpsmith1]

It's the golden rule.  He who has the gold makes the rules. 

The rich people don't want to give up their money, that's how they got rich in the first place.  They invest some of their money in ensuring that the tax code is favorable to them.  These are political contributions, but could be referred to as "insurance".  By doing this, the rich ensure that the tax codes stay tilted in their favor.

If I had the kind of money that the insanely rich had, I wouldn't pay a dime in taxes again for the rest of my life.  Everything that I did would be a business expense and written off on my taxes,  I'd hire shady accountants to cover up every dime that I could and the rest would be pumped into offshore accounts where the money was safe from Uncle Sam.

Sorry to say it, but anyone who says otherwise is a LIAR, pure and simple.

[Brett]

Great post, but you'll bring a bunch of crazy talk out of the woodwork now.  Expect semi-fictional words, semi-legit citations to semi-crazy websites, and semi-correct theories on tax law that are not even remotely based in reality. 

Dukkillr, you're amazing!  Do you also read Tarot cards and palms?    

Na, I guess a blind monk locked up in a monastery in Tibet could have seen TM7 coming. 

[Brett]

Here's what I don't get.  Why do some of you get so pissed off about the top 1.5% who have worked hard, invested wisely, and generally own businesses which employ a number of people and often give generously (even if it is just to avoid paying taxes) but say little or nothing about the bottom 40% who sit at home, make babies and live with their hands in our back pockets.  Both pay the same in taxes but the one is doing a lot more for our economy and our society than the other. 

[beemanbeme]

You don't have to have crooked accountants.  Its been tested in court, it is perfectly legal to manipulate --within the code-- your income and expenses so as to pay the least amount of tax possible.  In fact the big boys are looked at closely.  It is quite a feather in the hat of an IRS clerk that can blow the whistle on a rich guy.
What is to be done about the pols that pander to the bottom feeders with promises of more free welfare, more food stamps, more free clothes, free housing, etc so they will vote for them to ensure their own place at the public trough?

[magooch]

It's the golden rule.  He who has the gold makes the rules. 

The rich people don't want to give up their money, that's how they got rich in the first place.  They invest some of their money in ensuring that the tax code is favorable to them.  These are political contributions, but could be referred to as "insurance".  By doing this, the rich ensure that the tax codes stay tilted in their favor.

If I had the kind of money that the insanely rich had, I wouldn't pay a dime in taxes again for the rest of my life.  Everything that I did would be a business expense and written off on my taxes,  I'd hire shady accountants to cover up every dime that I could and the rest would be pumped into offshore accounts where the money was safe from Uncle Sam.

Sorry to say it, but anyone who says otherwise is a LIAR, pure and simple.

My friend, I don't know what you consider to be insanely rich, but if you think wealthy people somehow get out of paying much more than their fair share, then think again.  There are absolutely no tax deductions, or dodges exclusively available to the rich.  Yes, it is possible for the rich to cheat, just as it is for the not so wealthy.  In my experience, those who get the free-ride are those who are on the lower end of the wealth, or income scale.   

 

[jpsmith1]

Friend, if you think that 'rich' people pay taxes, then you are fooling yourself.  There are more holes, dodges and end runs built into the tax code by the politicians for their wealthy donors that any of us know.  Simple number tricks that make it look like the person took a business loss eliminate tax burden because taxes are only paid on profit.  When the 'working class' tried this a few years ago, several of them went to jail for tax evasion. 

The idea behind it was that as a worker, I charge 'X' for my hourly labor and my employer pays me 'X'.  Since I did not make a PROFIT on the year, I owe no taxes.  This of course is a shady dodge and should have been prosecuted as it was, but it's exactly what business owners do, year after year to avoid paying taxes.

The dodges may not be available 'exclusively' to the rich, but it's a case of you need money to save money.

If you ask me, the biggest tax fraud in this country is being foisted upon us by our own government.  The Earned Income Tax Credit is a HUGE welfare program.  Basically, if you live on welfare and don't earn enough, the government GIVES you a huge tax refund on taxes that you haven't even paid.

I am of the belief that 'you get what you pay for' and we, as a society, have PAID people to be poor for 60 years.  Now, we put out billions in support of lazy people who feel that a monthly check from 'mother government' is their birth right, while I work from 50 to 70 hours a week to support my family and theirs.

[beemanbeme]

JPSmith1, my question is, How do you stop it?  As you said, we have a class of people in this country that is several generations deep that believes that free money from the gov'ment is a birthright.  Can you imagine what LA, NYC, DC, Wild and Wonderful West Virginia, etc would be like if the checks stopped coming? 

Any "dodge" that is available to the rich is available to every tax payer out there.  If you win the lottery, first thing is to hire a tax accountant to manipulate your funds so as to pay the least taxes.  If that entails setting up foundations and such then that's whats done. 

[jpsmith1]

As far as the taxes, a flat tax is probably the most fair.  No deductions, no exemptions, pay 'x' percent of your earnings (Not profits) and that's it.  Yes, the wealthy would pay more, but they earn more.  The same percentage for everyone.

Welfare is a different problem.  It's so ingrained into our society that there is no fair and safe way to eliminate it.  While I don't have a problem with government aid to genuinely disabled people, vets and their families and some others, there is no reason that an able-bodied person shouldn't work for their living like the rest of us do.  All that said, other than a complete cut off of the program, I don't have an answer.

[beemanbeme]

I'd go with a flat tax.  How do you compute the charges to a guy that takes a company car in partial  lieu of salary, what if  it's a cadillac versus a Kia, or a home.  What about us poor folks?  What is our group medical worth? Free meals at the diner where we bus tables?  

To keep the pot boiling and to go kinda far afield, I think we need tort reform much more than tax reform.  

[beemanbeme]

TM7, is there anything about the United States that you do like?  Other than your ability to come into cyberspace and bitch?  I get so sick of hearing  bottom feeders whining about a "fair wage", I could puke!  I have said, in Wild and Wonderful West Virginia, what is considered a "good job" with a "fair wage" is a job for which you have no qualifications, no training, which has no demands of timeliness nor performance and which pays you about 10 times what you're worth. 
"importation of slave labour"   ROFLMAO.  I doubt that even you can say that with a straight face.  I assume you're talking about the mexicans.  Those people are risking their very lives to come here and take jobs that cannot be filled by our local work force because of the freebies and entitlements of our society.  Or do you think that lettuce pickers should be making $15.00 an hour with full benefits because they dropped out of school at 16 and picking lettuce is all they're gualified to do?  If you believe that, how much should a doctor make?  A lawyer?  If the guy picking up trash on the job site is making $35.00 an hour in wages and bennies, how much shoould a journeyman carpenter make an hour??  How much should/would a new house cost? 
How much money you NEED and what a job is WORTH are two different things

[jpsmith1]

TM7, how can supporting a flat tax equate with supporting a flat wage?  I support a flat tax because I believe it to be the fairest, most equitable form of taxation.  There are NO loopholes, capital gains would be taxed at the same rate as wages.  Yet, I support the idea that a person should be paid in proportion to the skill required to do their job and the QUALITY of work that they perform.  I'm an HVAC mechanic and, since I have certain advanced certifications, I'm paid more than my co-workers.  That's fair.  I put out a better quality product than they do.  Normally, when you hear a person talking about a fair wage, I have to agree with beemanbeme, they want to be paid more than what they are worth or get paid the same for less.  How much is a drive-thru jockey worth?  A grocery bagger?  The guy who pumps your gas?  These are menial jobs that were never intended to be careers.  Now, there seems to be a movement to make these jobs legitimate careers.   Who wants to bag groceries for 40 years?  Should a job like that have benefits and a retirement plan?  Should a job like that that requires at most a half-hours training, pay the same as a man who went to a trade school for 5 years or carries a degree?  I don't think so.

Honestly, reading some of your posts, you sound as if you have a Marxist bent to your political thoughts.  " If the gov needs money they should rob from those who have it cause that is where the money is.."  an exact quote from your previous post.  That sounds almost exactly like Karl Marx.  More recently romanticized by Robin Hood, but still Marxist.

If an immigrant wants to come here and work hard and achieve a better life for his family, I support that 100%.  If, on the other hand, n immigrant wants to come here to take advantage of our country's welfare system, they should be shot, not deported.  That would solve the immigration problem in a real hurry.

[beemanbeme]

"disenfranchising elitist principles"  Wow!  I don't know what that means so maybe I are one.  Can you explain, in small, single-sylable words, what that means??
And, fwiw, if I am the cause of WV's problems, I am one h*** of a man since I've only lived here a little over 5 years. 

[wncchester]

To make the math easy lets assume a flat 10% income tax.  Someone making $10K would pay $1K.  Someone making $200K would pay $20K, or 20 times more than the first guy.  Is that not enough difference, why should he have  to pay 40 or 50 times more and how is that supposed to be "fair"?

Even the money the rich have does good.  Their money provides jobs by supporting new or expanded industries, their money allows banks to lend me for a home, auto, etc.  Any of you ever of your ever make a good living by working for a poor man or really small business?  Not likely!  The concept of government determining what is a "fair wage" is foolish.  What I'm worth depends on how much I produce, not how much I would like to get for some piddling job that can be done by any poorly educated 17 year old with a weak back and poor work ethic.  I don't want to punish the rich, I want to benefit from them!

If we actually cut back on welfare handouts we could eliminate much of the fixed "entitlement" taxes we pay.

Fact is we do have an American "professional underclass" living on welfare, it's their chosen path in life. Perhaps as many as 75% of those on welfare are career paupers and they do it by choice, life choices matter.  Professional poor choose to ignore the free education we pay so much for, they have chosen to remain as ignorant as possible.  They won't take real jobs that require real work on a regular schedule.  The women sleep around and have multiple children by multiple fathers and then spend much of what we give them for child support to buy drugs or alcohol to "escape the horrors" of being poor and single.  None of them want to pay any penalty for choosing to follow a path to permant poverty.  And they have plenty of bleeding hearts on their side, people who want to protect them from that paths results.   Where would each of you be if you had chosen to loaf through a free public education, played with drugs instead, and wouldn't take a real job and stict to it?  

Another fact is, we couldn't possibly give the professional poor enough for them not to be poor.  They will easily blow through as much money as the government will take from working people and pour on them; check how the huge donations after Katrina were spent, remember how long that flood of "free money" lasted them and where it left them.  

Fat rich folks vote and support Democrats much more than Republicans.  Why?  Look at tax codes and remember who wrote in all those "loop-holes" in the first place, most of them came from Democrats curring favor and contributions.  The ultra-rich get too many breaks to vote out the party that reviles them while covertly protecting them!

Many of the "loop-holes" condemned by Democrat demagogues now were passed to change or encourage corporate actions, like tax breaks if they would hire and train societies losers.  A good idea maybe but it failed, of course, but the companies who tried it then got blasted by Ted Kennedy, et al, for using the tax breaks as "loop-holes".  What a mess they have made, but they always have the ready answer, "Send us more money!"

[beemanbeme]

Wow, Wncchester, you go some.  Very clear presentation.  Do you know what a "disenfranccising elitist" is?   

[nomosendero]

Great post, but you'll bring a bunch of crazy talk out of the woodwork now.  Expect semi-fictional words, semi-legit citations to semi-crazy websites, and semi-correct theories on tax law that are not even remotely based in reality. 

Mr. Beemanbeme,  dukkillr knew dang well what would happen & I did too. You see, we went through this same thing back in Feb. 2006 with a
thread that I started, in this case a restaurant:     http://www.graybeardoutdoors.com/smf/index.php/topic,85578.0.html

As you can see, the same anti Success, anti free enterprise & take from the achiever & give to the non achiever mentality came out with it's usual illogical & Socialistic fury. Why should anyone be surprised?

[muskeg13]

Also, this little war ("war on terror to make the world safe for the global economy") is quite expensive, yet probably benefits int'l corporates more than the common citizen.

TM7:  This is exactly the type of incredibly stupid remark I have come to expect from you, and you didn't disappoint me here.  I guess that you feel that the poor misunderstood muslim brethren who have decided to wage war on the west only seek to harm the big bad corporations ( who incidentally provide the jobs and fuel the economy), but they have no real desire to actually maim and kill the thousands of innocent men, women and children who were unfortunate enough to have been in the way.  You ought to be ashamed of yourself, but I know that you aren't.

[muskeg13]

The war on terrorism is not just the skirmish going on in Iraq.  That is but a sideshow.  Wake up man! 

[wncchester]

[beemanbeme  Wncchester, you go some.  Very clear presentation.  Do you know what a "disenfranccising elitist" is?   

Thanks,  I think.  !!!!          No, I'm not sure about that term; enlighten me?

I left out my real "bottom line" above, ie, The government takes our money but they add little value to anything but highways and they do that at great cost - can anyone say "Big Dig" in Boston?  Their tax plans are great killers of the economy tho. 

Government has proper functions.  They did pretty well until they started exceeding those functions during the expensive but ineffective "New Deal" era.

Some would ask what makes me such a harsh "authority" on poor people, it's valid question too.

Well, for 15 years I tried to make a few bucks with low cost rentals and it nearly bankrupted me, in fact it still may because I haven't been able to get out of the hole some 6 years after abandoning the idea.  I would buy old homes, rehab them and rent them in good shape but for low rent. But I couldn't repair them fast enough!  Renters often wouldn't pay after a couple of months, so I had to wait two months before taking them to court, at my expense and on my time, for the court to say evict them after one more month of free living.  For many, I'd  get two or three months of rent for 6 or 8 months stay but I had to pay the mortgage - and property taxes - EVERY MONTH!  And then I had to do the repairs and another rehab when they finally left.  Believe me, lower rent land-lords get a full insight into the minds of our untaxed government protected "poor"!

[Brett]

I know what you mean wncchester, I have done rahab and clean up work in section 8 housing myself.  Their mentality appears to be "the house/apartment aint mine so why should I take care of it or even bother to clean it.  If Jr. wants to write all over the walls and tear the doors off there hinges , let him."   And the thing that irked me the most is that many of these sit at home welfare princes and princesses drove newer and or nicer vehicles than me and had TVs, stereos, gold juwelry, etc that I only wish I could afford without taking food out of my kids mouth.   

[nomosendero]

I guess that means it is OK to be judgmental when it comes to tax payers as you just did, but not judgmental when it comes to folks on Welfare.
Actually, some want to rise out of it & it is good to see, but many clearly don't. By their fruits we can know them without making a judgment call. That is the difference between the "Dependent Class" & those who are in the short term down on their luck.

[nomosendero]

Also, this little war ("war on terror to make the world safe for the global economy") is quite expensive, yet probably benefits int'l corporates more than the common citizen.

TM7:  This is exactly the type of incredibly stupid remark I have come to expect from you, and you didn't disappoint me here.  I guess that you feel that the poor misunderstood muslim brethren who have decided to wage war on the west only seek to harm the big bad corporations ( who incidentally provide the jobs and fuel the economy), but they have no real desire to actually maim and kill the thousands of innocent men, women and children who were unfortunate enough to have been in the way.  You ought to be ashamed of yourself, but I know that you aren't.

.
FACTS:
I stand by that little quote of mine as being the God awful truth.
The war has been expensive and not audited properly, or even legal by our law.
The necessity and truth surrounding the war (and Sad'Dam, WMD, etc.) are questionable.
I don't hate Mos'lems like you do.
It was GWB who said this is a 'war on terror to make the world safe for the global economy.' not me.
It is not my presidential cabinet that has 4 or 5 members with dual citizenships.
You want to talk about shame and unAmericanism than start a thread and we'll talk about it.

...TM7

All so nice, but we had the tax problem (the Subject) before this admin., so this has nothing to do with it, kinda like the Hundi vs Escalade thing.

[magooch]

I believe that a flat tax would obviously be the fairest tax, but the reason it won't work is because it would either require the federal government to cut spending by 80%, or it would amount to a huge increase in tax on most people.

At present, the average family of four with an average income, pays a very low tax rate (if any) and retired folks with an average pension and social security would also get a considerable tax hike, even if the flat-rate were 5%.

No flat-rate program that I've ever seen proposed, talks about rates any lower than about 17%.  That would be devastating to the vast majority of taxpayers.

[beemanbeme]

Magooch, if you were to consider the fed tax, state tax, county tax, city tax, sales tax, gas tax, hotel tax, airplane tax, user's fees, and all the little nibby add on taxes of a few pennies here and a dime there, the tax rate would run quite a bit above 17%

[jpsmith1]

I believe that 'Tax Freedom Day" is some time in May, at least here in PA.  Every dime you earn up until that day is supposed to go to pay taxes of one type or another.  That puts the total taxation rate around 45-50%.  I know that it's a generalization, but it's still crazy that we work half the year for the government.

[magooch]

Magooch, if you were to consider the fed tax, state tax, county tax, city tax, sales tax, gas tax, hotel tax, airplane tax, user's fees, and all the little nibby add on taxes of a few pennies here and a dime there, the tax rate would run quite a bit above 17%

So what's your point?  I thought we were talking about federal income tax.  I haven't heard of any scheme that would replace all other taxes with just one flat-rate tax.  We are talking reality here--right?