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:
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 $100.00. 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 $1.00
The sixth would pay $3.00
The seventh $7.00
The eighth $12.00
The ninth $18.00
The tenth man (the richest) would pay $59.00
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 $20.00"
So,
now dinner for the ten only cost $80.00. 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 $20.00 windfall
so that everyone would get his "fair share"?
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