Taxation Example Story (Sad but True):
Suppose that every day, five men go out for drinks and the bill for all five comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…
The first man (the poorest) would pay nothing
The second would pay $4
The third would pay $9
The fourth would pay $18
The fifth man (the richest) would pay $69
So, that’s what they decided to do.
The five men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.
“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 five men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first man was unaffected. He would still drink for free. But what about the other four men ? How could they divide the $20 windfall so that everyone would get his fair share?
The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts that each should now pay.
The second now paid $2 instead of $4 (50% saving).
The third now paid $6 instead of $9 (33% saving).
The fourth now paid $13 instead of $18 (28% saving).
The fifth now paid $59 instead of $69 (14% saving).
Each of the four was better off than before. And the first continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got $2 out of the $20 saving,” declared the second man. He pointed to the fifth man, ”but he got $10!”
“Yeah, that’s right,” exclaimed the third man. “I only saved $3. It’s unfair that he got three times more benefit than me!”
“That’s true!” shouted the fourth man. “Why should he get $10 back, when I got only $5? The wealthy get all the breaks!”
“Wait a minute,” yelled the first man, “I didn’t get anything at all. This new payment system exploits the poor!”
The four men surrounded the fifth and beat him up.
The next night the fifth man didn’t show up for drinks so the other four sat down and had their 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, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
And you wondered how a system so convoluted, that gives the most support to the poor, more foreign aid than any other country, supports everything else on the budget, and you wonder why people working are getting sick of working while everyone else sits home waiting for their government handouts?
Debt Reality:
The federal debt (all accumulated debt over years) is approximately $20 trillion ($20,000,000,000,000.00).
The federal college loans outstanding – $1.3 trillion (44 million borrowers)
Puerto Rico just declared bankruptcy – $70 billion outstanding debt
Illinois – On the verge of bankruptcy – $203 billion debt
California – Close to the verge of bankruptcy – $443 billion debt. By comparison: Michigan – $6.3 billion debt.
To my fellow taxpayers – there is no good outcome for this scenario. There are three ways to confront this:
- Cut budgets to the bone and use revenue to cover all debt incurred presently and pay down existing, compiled debt from excess revenue.
- Pay more in taxes.
- Print more money (debt) and try to get others to buy our debt.
- The prudent, thinking person would elect #1, and if that wasn’t enough, combine Nos. 1 & 2 to pay down debt.
The politician doesn’t think that way. Cutting budgets will not help them get re-elected and upping taxes would equal the same result. The only way they look at it – have the Fed (Federal Reserve) start printing more money, and selling treasury bonds/bills to any country wanting to own our debt.
By not living within our means as a government, we are slave to the lender (China, Japan, any other country owning our treasury bonds/bills). We can laugh it off, but eventually, we must repay the debt, one way or another. What is your freedom and liberty worth? Do you want your children, grandchildren, great- grandchildren to live in bondage (sending all their earnings) to those we owe?
Are you getting hot under the collar, do you now realize the problem, do I make myself clear, or am I being too obtuse? WAKE UP! Demand more from your state and federal politicians; governor, president, representatives, senators, and bureaucrats.
Put their feet to the fire. They can only ignore you so long before they are shamed into doing something. Hopefully, they will select the right path, but I’m not hopeful. Most don’t even realize how far government is from the Constitution since they don’t read it or have never read it. Or they just ignore it — much to our detriment. But it isn’t about you, it’s about them.
