Tuesday, January 29, 2008

Political Rant - Brace Yourself!

Today our wonderful US House of Representatives passed the "stimulus package." The solution to the economic crisis in America. This is the plan that will provide tax rebates for individuals who really haven't paid much in taxes - but gives nothing to those hard-working Americans like my husband and I. We work hard to make ends meet and hand over a good portion of our earnings in the form of taxes - but we are literally ignored when it comes time for rebates. Once again, the government will take money we have worked hard to earn - and hand it over to those "less fortunate."

Don't get me wrong - I'm all for helping those in need. But I am struggling to understand how I can continue to teach my children to be self-sufficient, when our government continues to reward those that are not. My husband and I are currently paying for two kids in college. We were told we made too much money to qualify for any financial aid - so we have had to take out substantial educational loans. Consequently, I work a full-time job, plus a part-time job, and my husband works a full-time job. We will not qualify for the tax rebate. We get to continue to work endless hours every week to support our family, while others are offered financial aid for their children and will now also receive a tax rebate.

This came around in email today and was too perfect to not share here:

Suppose that every day, ten men go out for beer and 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 would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.


So, that's what they decided to do. The ten men drank in the bar 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 beer by $20. Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?How could they divide the $20 windfall so that everyone would get his 'fair share?'

They 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 each end up being paid to drink his beer. So, the bar 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, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).


Each of the six was better off than before. And the first four continued to drink 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. He pointed to the tenth man,' but he got $10!' 'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!' 'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? 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 drinks, so the nine sat down and had 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, journalists and college professors, is how our 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia


With gas prices well over $3 per gallon and costs going up everywhere I turn, what options are left for hard-working Americans?

1 comment:

Anonymous said...

I find it hard to feel sorry for you. If you aren't receiving the tax rebate, you must be doing quite well for yourself don't you think? Others work; they just make less than you do. It won't hurt you to help others.