Monday, June 4, 2001 Volume XXVI, No. 4
In this issue:
The Fairness of Tax Cuts*
(Explained so plainly that even Dick Gephardt can understand it!)
The Story: "Tax Cut for the Rich"
Every night, 10 men met at a restaurant for dinner. At the end of
the meal, the bill would arrive. They always owed $100 for the food
that they had shared.
Every night they lined up in the same order at the cash register
to pay the bill. The first four men always
paid nothing at all. The fifth, grumbling about the unfairness of
the situation, always paid $1. The sixth
man, feeling a little put out, paid $3. The next three men paid
$7, $12 and $18, respectively. (Together, the first nine men always
paid $41.)
The last man was always required to pay the remaining balance of
$59. Of course he realized he was paying not only for his own meal
but the unpaid balance left by the first five men.
The 10 men had been doing this for a long, long time, and were quite
settled into their routine, when the
restaurant changed hands and threw them into a state of confusion
merely by announcing that it was cutting its prices. Henceforth
the same meals would only cost the ten men $80.
It took a little while to work out the new arrangements, but soon
it was clear. The first four men were completely unaffected: they
still ate free of charge. The fifth man, who had been paying a dollar,
joined them, announcing he would now pay nothing as well. The sixth
man lowered his contribution by 1/3, and now paid only $2 (instead
of $3). The seventh man reduced his contribution by almost 30% and
now paid only $5 (instead of $7). The eighth man paid $9 instead
of his usual $12. The ninth man paid $12-----$6
less than before. This left the last man with a bill of $52, a full
$7 lower than he had been paying for years.
Everyone took it in stride since the burdens and the benefits fell
roughly to the same people as always, even though six of the men
realized some savings.
A few days later however, a liberal activist began talking to the
men and in short order they began to grow more and more agitated.
Suddenly one evening as the 10th man arrived for dinner outside
the restaurant, the men began yelling at him about their relative
savings.
In an angry outburst, the sixth man yelled: "I got only $1
out of the $20 in cost reduction, and he got seven bucks!"
pointing at the last man. The fifth man joined in: "Yeah! I
only saved $1 too. It is unfair that he got seven times more than
I got." (That same fifth man of course, was now eating free---but
that didn't seem to matter.) The seventh man cried, "Why should
he get a reduction of $7 when I only got $2?" And the
eighth man chimed in with, "I've only got three bucks to show
for that reduction, while he's getting more than twice as much of
the savings as I got."
The nine men formed an outraged mob, surrounding the 10th man. Incredibly,
the first four men followed the lead of the others, even though
they had never paid a cent for any of their meals: "We didn't
get any of the $20 reduction in cost, where is our share?"
The nine angry men with the liberal activist at their side (now
joined by a "community empowerment specialist," an "advocate
for progressive programs," and two executive directors of non-profit
"citizen assistance" groups) then carried the 10th man
up to the top of a hill and lynched him.
The next night, the nine remaining men met at the restaurant for
dinner. But when the bill came, there was no one to pay it. The
community activists were having dinner in one corner of the restaurant----on
the tab of their "non-profit" organizations, but none
of them even bothered to look in the direction of the
nine men.
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* Let's Talk Sense...is always original work, however, this particular
article was sent by a reader who took it from the March 4th edition
of the Chicago Tribune. LTS...has re-written it only slightly. The
ratios are roughly accurate when compared to the tax burden of the
American people: 10% of the taxpayers
pay about 60% of the taxes collected, 30% pay 37%, and 60% collectively
pay only 4%.
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Let's Talk Sense...is an e-mail newsletter (now reaching 3,185 readers) about electoral politics---especially devoted to psephology---examining campaigns, their tactics and the targeted electorate. There is often special focus on New Mexico.