BGIII

iTrader: (3)

by Neil Cavuto, Fox News
May 2002


Let's put tax cuts in terms everyone can understand. Suppose that everyday, 10 men go to dinner. The bill for all 10 comes to $100. If it was paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59.

The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement until 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. Now dinner for the 10 costs $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share? The men realize that $20 divided by six is $3.33, but if they subtract that from everybody's share, then the fifth man and the sixth man would end up being paid to eat their meal. 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 $12, leaving the tenth man with a bill of $52 instead of $59.

Outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man pointing to the tenth, "and 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 something important: they were $52 short!

And that, boys and girls and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

Some of you might argue that this little story trivializes the tax
debate. But not me. I think it puts it in good perspective.
When opponents of tax cuts play the class game, remember that dinner scene and ask yourself this question: Who is feasting on whom? The rich guy that got a break, but still paid the largest share of the bill, or the poorer guys, some of whom didn't pay anything at all? The rich guy could afford it and paid. The poorer guys could not and did not.

Some people want something for nothing and others say nothing for those who have something.

I say, enough. Because the only one really feasting at this dinner is the guy who owns the restaurant. And the only one feasting at this ridiculous tax system is the guy who owns the trough - Uncle Sam.

He might like to keep us arguing like this. After all, he's getting the
money and lately he's been feasting pretty well.

We give. He takes. We argue. He takes more. We stop and start thinking about the lunacy of it all, he takes out ads.

The problem, my friends, isn't the rich and what they pay, but the
government and what it takes. Because trust me, the restaurant owner is happy and so is Uncle Sam.

above written entirely by Neil Cavuto.



I'm not paying $59 for my dinner, but I sure do agree w/ the above. - BGIII

stevequick

BGIII, You are so absolutely correct.

Steve 1

Correct!

rjcardinal

Two Words... FLAT TAX!

Ron

Steve 1

National Sales Tax!

SeaRay Jim

I also heard a talk radio jock say that the other day.

I agree with either, Flat Tax or Sales Tax. Either would be fair and more equitable. Fed Inc Tax Code sucks!

SABER28

don't you think a 20-25% sales tax would kill big ticket item sales, can you imagine the sticker shock at paying $50,000 in tax on a 200K boat

Playn

Actually getting rid of 90% of the Government programs would get my vote. Then they wouldn't need the $

Steve 1

Taxes
* Total tax collections in the U.S. were $2,667,000,000,000 in 1998.(1) This represents 35.4% of the country's total income.(2)

* Medieval serfs paid an effective tax rate of 33.3% and were considered slaves.(3)

* The Tax Foundation (a non partisan organization established in 1937) calculates something known as "Tax Freedom Day". The calculation illustrates the average number of days Americans work into a year to pay their taxes.
Year Tax Freedom Day
1930 Feb. 12
1950 Apr. 03
1970 Apr. 26
1980 Apr. 30
1990 May. 01
2000 May. 12
2002 Apr. 27
(2)

* In 1997, Democrat Senate Minority Leader Tom Daschle said "I don't think the American people are overtaxed." In 1997, Bill Clinton told the people of Virginia, that they would be "selfish" to favor a reduction in the Virginia car tax.(4)

* Bill Clinton made this claim in his Feb,2,1998 State of The Union Address: The typical middle class family will have the lowest tax rate in 20 years.(5) Federal taxes in 1998 will be 20.1% of the Gross Domestic Product, which is the highest level any year since World War 2.(24) Tax Freedom Day (an average) has been pushed out 9 days since Bill Clinton became President. Taxes for the U.S. median family as a percentage of income:
1977 1997
single income family 33.9% 35.9%
dual income family 36.5% 37.6% (2)

* Republicans attempted to pass a Constitutional Amendment in 1997 that would have required a 3/5ths majority vote in both Houses of Congress in order to run a deficit. To create a Constitutional Amendment, it must pass both Houses of Congress with a 2/3 majority and 3/4 of the individual States must ratify it. The Amendment was defeated primarily by Democrats. N.J. Senator, Democrat Bob Toricelli promised voters in his 1995 campaign that he would vote for a Balanced Budget Amendment. He voted against the Amendment and it failed to pass the Senate by one vote. (10)(14)

* The tax cuts in the 1997 budget agreement were pushed for and secured by Republicans. The tax cuts included an increased child tax credit and a reduction in the capital gains tax. As of 1998, Republicans in Congress are trying to enact numerous proposals to cut taxes. Among the proposals: ending the marriage penalty, eliminating estate taxes, further reducing the capital gains tax, and eliminating the tax on Social Security benefits. (11)

* In 1997, the top 1% of income earners in this country paid 29% of the total federal income taxes.
The top 10% of income earners paid 60% of the total federal income taxes.
The top 20% of income earners paid 74% of the total federal income taxes.
The bottom 50% of income earners paid 5% of the total federal income taxes. (6)

* 32% of individual federal income taxes are needed in order to pay the interest on the national debt of $3,500,000,000,000.(15)(16)(1998 figures)

* The "Flat Tax" is a proposal by Republicans Dick Armey and Richard Shelby to change the federal income tax to a single flat rate of 17%. Under this proposal, a family of 4 with an income of $48,890 would pay $2,990 in federal income taxes, as opposed to the $3,967 they would pay under the current system (1998 figures).(2)

* A family of 4 with an income of $32,000 would pay no federal income taxes under a flat tax (1998 figures).(7)
* A flat tax would reduce the costs of compliance (i.e. accounting costs, tax attorneys)with the federal tax code. If the costs of compliance ($236,000,000,000 in 1997) were added into the Tax Freedom Day calculation, Tax Freedom Day would come 13 days later into the year.(2)

* A flat tax would reduce the influence of the 67,000 lobbyists employed by special interest groups who lobbied the federal government to the tune of $8,400,000,000 in 1997. Most lobbyists work securing and protecting tax deductions, shelters, and loopholes for their employers.(8)

* Bill Clinton and most Democrats are opposed to a flat tax.(8)

* Taxes we pay, which we may not be aware of, are called "hidden taxes". Typically, hidden taxes start out as corporate taxes and are eventually passed along to consumers in the form of higher prices.(17)

* As of 1998, there are 30 taxes on a gallon of gas amounting to 54% of the final purchase price. There are 18 taxes on a pizza.(17)

* In the 1996 Telecom Bill, there exists language that asks the FCC to "enhance" the access of school children to the Internet. The FCC (run by political appointees) decided the language in that bill allows them to tax the telephone companies in order to pay the cost of wiring schools for Internet access.(18) A vote of Congress is required to establish a federal tax. Congress did not vote on this.(19)

* The FCC expected the phone companies to absorb this tax. Many phone companies defied the FCC and listed the tax as a separate line item on the phone bill.(18)(22)

* To administer this program, the FCC created a new bureaucracy. The head administrator, Ira Fishman, was assigned a salary of $200,000. The total cost of the program would have been about $2.3 billion, costing the average household $25/year.(23)

* When Republicans protested, The FCC cut the program to $1.3 billion, cutting wealthier schools out of the program and folding the bureaucracy into an already existent corporation.(18)

* Al Gore supported this proposal and went on tour with then FCC chairman Reed Hundt, speaking about the federal mandate to wire every school and library for Internet access. (23) On June 10,1998 Al Gore stated "Students in predominately minority schools were 3 times less likely to have Internet access than those in predominately white schools."(20) On June 8,1998 Al Gore stated, "The e-rate is critical to our efforts to put computers in every classroom and library, giving every child the tools to succeed." (19) According to the 1997 tax return of Al and his wife Tipper, they earned $197,729 and gave $343 to charity.(21)
Tax Bites (25)

* About 82% of what consumers pay for a pack of cigarettes ends up going to the government in taxes. Based on recent averages, the total price for a pack of cigarettes in the U.S. is now $3.73. Only 8 cents of that goes to the farmer and about 28 cents go to those "rich" tobacco companies. The remainder goes to the government.

* If the American consumer pays $1.59 for a loaf of bread, they are paying 64 cents in taxes.

*30% of the price of an airline ticket goes to pay such things as federal excise tax, a $2.50 surcharge tax for air traffic control services, a $12.40 arrival tax, a $12.40 departure tax, a $5.00 Customs Users tax, a $6.00 Immigration tax, a $2.00 agricultural inspection tax, among other state and local taxes.
Other tax bites
automobiles 38% taxes
electricity 25% taxes
firearms 46% taxes
liquor 44% taxes
telephone 50% taxes
soft drink 35% taxes
tires 36% taxes
More Tax facts;

* The typical American family pays more in taxes than in food, clothing and shelter combined. That is, over 38% taxes, and 28% for food, clothing and shelter.

*The average tax rate for taxes filed in 1916 was 2.75%. Today, the typical families pays a combined 38.2%.

* When Bill Clinton claimed his tax hikes hit only the rich, he ignored the huge tax increase he placed on middle income seniors. He subjected 85% of Social Security benefits to federal income taxes for unmarried seniors earning more than $34,000 and married seniors with combined income of $44,000 or more (only $22,000 per person). These figures were not indexed for inflation, which means that each year, more elderly Americans have their benefits taxed.

If you are an employee, have you ever complained about not being paid enough? Before you do that the next time, consider this, today an average manufacturing worker costs his employer $14.89 an hour (not including fringe benefits). But the employee’s take home pay is only $10.79 an hour.

The government takes $4.10 per hour in taxes – federal and state income taxes, payroll taxes, unemployment insurance taxes and worker’s compensation – thus reducing the worker’s take home pay by 28%. For a worker earning $60,000 a year and living in a state with average taxes, the government’s share rises to 36%. (26)

American’s like to talk about Corporate Welfare, but in actuality, the government imposes a 35% tax on corporate income, and states, on average, take another 5%. This is the forth highest tax burden of corporations in industrialized nations. Also, U.S. Chartered firms must pay tax on income earned in other nations. This puts U.S. corporations at a disadvantage since most of our trading partners rely on a "territorial taxation", the commonsense notion that governments only tax income earned inside their borders. (27)
Sources:

Steve 1

1) McCaslin, John. "Inside The Beltway: Pay to play." Washington Times National Weekly Edition, June 8-14, 1998.
2) Tax Foundation Website (www.taxfoundation.org) August 7, 1998.
3) Mitchell, Daniel. "Working for The Man until May 10." Washington Times National Weekly Edition, May 18-24, 1998.
4) Pierce, Greg. "Inside Politics: The real stripes." Washington Times National Weekly Edition, November 10-16, 1997.
5) Miller, James III. "Clinton budget just doesn't add up." Washington Times National Weekly Edition, February 9-15, 1998.
6) Lambro, Donald. "Debunking popular American myths." Washington Times National Weekly Edition, September 1-7, 1997.
7) Independent calculations based on data from Source 2
8) Armey, Dick. "Here's a way to flatten taxes." Washington Times National Weekly Edition, November 24-30, 1997.
9) Family Research Council. "Tax Limitation Amendment." Legislative Hotline, March 6, 1998.
10) The Republican Presidential Task Force. "One Man. One Vote. One Betrayal." American In Crisis, 1998.
11) Hallow, Ralph Z. & Godfrey, John. "GOP's tax proposals evoke Reagan's." Washington Times National Weekly Edition, January 22-28, 1998.
12) Akers, Mary Ann & Godfrey, John. "GOP says Clinton spending plan may break the budget." Washington Times National Weekly Edition, February 2-8, 1998.
13) Kudlow, Lawrence. "Republicans should take credit for the budget surplus." Washington Times National Weekly Edition, February 2-8, 1998.
14) Project Vote Smart Website (www.vote-smart.org) August 7, 1998.
15) Editorial: "Don't start the celebrations just yet." Washington Times National Weekly Edition, January 12-18, 1998.
16) Independent calculations based on data from sources 2 and 15.
17) Pierce, Greg. "Inside Politics: Hidden taxes." Washington Times National Weekly Edition, December 29, 1997-January 4, 1998.
18) Editorial: "The Gore tax." Washington Times National Weekly Edition, June 22-28, 1998.
19) Kellner, Mark A. "Al Gore's tollbooth on the information superhighway." Washington Times National Weekly Edition, June 15-21, 199