Taxing the greedy rich!

Mar 14, 2015, 2:35 PM

Liberal Democrats love to clamor incessantly about how the rich avoid paying their fair share of taxes. This despite the fact that the rich pay far more in taxes than the rest of us.

The reason liberals make this absurd claim is because they resent the many tax deductions that our government proffers to the wealthy. The premise therefore is that the rich should be given zero deductions — and thus forced to pay their “fair share.”

But what would happen if the government removed these deductions? Read the anecdote below to find out:

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, 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 $80.00.

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 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 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 who pointed to the tenth. “But he 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 he 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, 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 straightforward logic!

Exactly. If the government were to do away with deductions (and thus attack the wealthy), they would in effect be removing the wealthy’s incentive to keep earning money in the United States.

So what would the wealthy do? They’d simply pack their bags and move their operation to a country that hosts more intelligent tax laws.

Unfortunately, liberal Democrats like President Barack H. Obama seem incapable of comprehending this simple lesson. Thus they keep trying to increase taxes, which does little more than force wealthy business owners away from the table.

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http://taxfoundation.org/blog/obama-and-gibson-capital-gains-tax-exchange

GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent. But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

Taxing the greedy rich!

Re: Taxing the greedy rich!

Think about what Obama is saying. The man is loopy.

You forgot the 11th guy

The filthy rich put their money where they can get the

Re: The filthy rich put their money where they can get the

That may have been the rate, but nobody paid it. And how

Re: That may have been the rate, but nobody paid it. And how

So decreasing return on investments results in more

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