Here is the problem with those who feel the wealthy get all of the breaks...
This is a VERY simple way to understand the tax laws. It DOES make you think.
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 $13, and the tenth
man (the richest) would pay $59. 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 (in tax
language, a 'tax cut'). "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. 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,
the fifth man and the sixth man would 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 amount, and he proceeded to work out the amounts each should
pay. And so the fifth man paid nothing, the sixth pitched in $2, the seventh
paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a
bill of $52 instead of his earlier $59.
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. "But he
(pointing to the tenth man) got $7!". "Yeah, that's right," exclaimed the fifth
man. "I only saved a dollar, too. It's unfair that he got seven times more than
me!". "That's true!" shouted the seventh man. "Why should he get $7 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 a little late what was
very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine
that!
And that, boys and girls, journalists and college instructors, is how the 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, abuse them in
some way, and they just may not show up at the table anymore. Where would that
leave the rest? Unfortunately, most taxing authorities cannot seem to grasp this
rather straight-forward logic!