A freeper's tax cut analogy - does this make any sense?

[laura888]

OK - my freeper work mates all agree that the following is "hilarious and so true." Help me come back with something!

-->

Hilarious and so True

   I was having lunch with one of my favorite friends
   last week - a very liberal college professor - and the
   conversation turned to the government's recent round of tax cuts.

   "I'm opposed to those tax cuts," the Professor
   declared, "because they benefit the rich.
   The rich get much more money back than ordinary
   taxpayers like you and me and that's not fair."

   "But the rich pay more in the first place," I
   argued, "so it stands to reason they'd get more money back."

   I could tell that my friend was unimpressed by this
   meager argument.

   So I said to him, let's put tax cuts in terms
   everyone can understand:
   Suppose that every day 10 men go to a restaurant
   for dinner.
   The bill for all ten comes to $100.

   If it was paid the way we pay our taxes,
           The first four men paid nothing;
           The fifth paid $1;
           The sixth paid $3;
           The seventh $7;
           The eighth $12;
           The ninth $18.
           The tenth man (the richest) paid $59.

   The 10 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 only costs $80. The first
   four are unaffected. They still eat for free.
   Can you figure out how to divide up the $20 savings
   among the remaining six so that everyone gets his
   fair share?

   The men realize that $20 divided by 6 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 percentage, being sure to give each a break, and
   he proceeded to work out the amounts each should
   pay.

         And so now:
           Along with the first four, 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 $59.

   Outside the restaurant, the men began to compare
   their savings,
   "I only got a dollar out of the $20," complained
   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.  "We
   didn't get anything at all.  The system exploits the poor."

   Then, the nine men surrounded the tenth man (the
   richest one, paying the most) and beat him up.

   The next night the richest man didn't show up for
   dinner, so now the nine men sat down and ate without him.
   But when it came time to pay the bill,
   they discovered something very important.  They
   were $52 short!

   And that, boys, girls and college professors, is
   how America's 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 any more.

[RandomKoolzip]

1. Man, when will the rich ever get a break?

:eyes:

[bryant69]

2. Yeah I've heard this one before.

Here's my response.

"For those who have heard the Parable of the ten men
who went to dinner ("Ten guys went to dinner, and they
decided to pay their dinner bill the way they pay their taxes.
Blah blah blah blah blah blah blah. So you see if we
don't coddle the rich they will leave America and society
will collapse.")

Here's my version.

"Ten men went to dinner.
The first Five had the complementary bread and water.
The Sixth had a side order of fries and water.
The Seventh had a small house salad and water.
The Eighth had a chicken fried steak, some fries and a soda.
The Ninth had a nice steak and salad, with a glass of wine.
The Tenth had a five course meal with salad, soup, lobster and steak, desert and coffee.

"When the check came, the tenth picked it up and said,
"Well there are ten of us and the bill is $100.00. That will be $10.00 each."

This is of course a terribly flawed parable, but it's no worse than the other one.

From my website --> http://politicalcomment.blogspot.com

Bryant

[tom_paine]

4. Well said, bryant69

:toast:

[Beaker]

7. Exactly- not all dinners are created equal.

your parable is closer to reality than the puke's.

[Interrobang]

3. This might make sense if you didn't figure in other kinds of taxes

Like property taxes, for instance, which are inherently regressive, or sales taxes, or corporate taxes. Since poor people pay more in regressive taxes as a percentage of their income than rich people, it kind of evens out.

I don't have enough of a bg in economics to poke big holes in this, but if you really want to know, PM someone like ProfessorGAC, who did a major take-out of this the last time it was posted.

[tom_paine]

5. Exaftly. This ignores payroll taxes, which fall primarily on the poor

Ignores them completely.

And yes, PM Professor GAC or J B to receive a devastating counter smartly worded.

tom

[RobertSeattle]

6. Some Snopes info...

http://www.snopes.com/business/taxes/howtaxes.asp

[mkultra]

8. seems that once again

The repukes have succeded in cutting all relevant portions out of an argument in order to create a simple metaphore whihc servers their greed.

TO better adjust the scenario
The Dinner should cost $100,000 dollars instead of $100. which would be due to the fact that while the first 9 people have only $1000 each, the tenth man has $1billing dollars making the market more expensive for everyone else. Next, the tenth man never pays for his meal because he claims to be be poor and to live in another country while the portion that everyone pays for (drinks) is the only portion that gets discounted by the owner.


Rich people can screw off. They pay the same in taxes on their first $75K that the rest of us do. Its only their excess cash the gats hit at a higher rate. For that matter anyway, lowering taxes hurts the worker because if income taxes where dropped, compaines would respond to the vacume by reducing pay to workers as the wages market functions off supply and demand as well. Finally, the benifits that the working man needs to SURVIVE would be cut so that taxes would be reduced.

[Ready4Change]

9. Here's my rebuttal:

When I and my friends eat dinner, we pay according to how much we as individuals order. In this tax analogy, that's equal to paying taxes according to how much income we take in.

Changing dinner orders to incomes, we find that 4 men earn no income, and thus can't afford to eat. The 5th through 9th have increasing incomes and order increasing amounts. The 10th gets more income than the other 9 combined, and thus orders more for dinner than the other 9 combined.

At this restaurant, which I shall name " Le Non-Partisan" the owner split the "refund" evenly across the board, and it was easy to determine what he did.

Had these 10 eaten at "Chez Dubbya", all 10 would have been told they were going to get huge refunds on dinner, but the bill would have been so complex that only the 10th man could have afforded an accountant to figure it out and ensure the 10th man gets his part of the refund. And since this 10th man eats at "Chez Dubbya" so often, he and the owner have an "arrangement" where the 10th man actually gets quite a bit more than his "fair" share, and he slips a bit of that back to the owner as he leaves.

Of the other 9 diners at "Chez Dubbya" , men 1 through 5 still get nothing, man 9 gets a little, and men 7 and 8 actually wind up paying a little extra, once they figure in the parking fees they have to pay since seem to always get stuck driving while everyone else sleeps off dinner in the backseat.

At least, that's my .02

[Beearewhyain]

13. And because #10 brings in so many to Chez Dubbya

the owner arranges for him to come in by himself to eat for free without letting the others know. All the while #10 cries, bitches and moans about how unfair things are for him. Poor Mr. 10.
:nopity:

[never cry wolf]

16. In addition you can add

That the 10 men are brothers, 2 are unemployed, 2 work for minimum wage, one works 60 hours a week at Wal-mart, one is a carpenter, one is in insurance sales, one is a middle manager at a corporation, one is a doctor and the 10th won $50M in the lottery.

Should not the lottery winner bear the bulk of the burder for his brothers to eat?

[Scottie72]

28. one small addition to your addition....

60 hrs paid at Wal-mart per week? Well i would add works 60 but only gets paid for 40. There is no way Wal-Mart would actually fairly pay for 60hrs work!

Great additions! :bounce:

[ihaveaquestion]

10. This is an old story.

The first comeback is to point out that the premise of poor people not paying taxes is bogus. They may not pay income taxes because they don't make enough money, but they pay payroll taxes which comes off the top of their wages. Many of the rich don't have to pay paroll taxes since they don't earn wages, they earn dividends and profits from investments. If this story had taken this into account it might be more valid. But, I don't believe even this would even out the disparities. Maybe someone knows where the numbers might be found.

I usually counter this arguement with these - point out that in a country as wealthy as ours, a) no child should go hungry or lack a decent education or die from a lack of health care; and b) corporations shouldn't be able to shirk their responsiblities by polluting our environment and getting away with it or dropping bombs on stockholders the way Enron did.

But, you might as well get used to disagreeing on this, these things seem to be beyond the grasp of most freepers.

[laura888]

11. The main argument presented here is...

... the rich should not have to pay more taxes for services they don't use more than the rest of us do.

The problem is, if we make it an equal across the board payment, then tax revenues will go WAY DOWN, unless we can either - cut services or raise taxes on the rest of us.

Do repubs want to cut services? Do they really want to live in a society in which there are beggars (well, at least more than what we already have)?

Also, I don't see the repubs cutting services - I just don't see it. They just run up deficits.

[Toots]

19. ... the rich should not have to pay more taxes for services they don't use

How many potholes have you ever seen in a rich neighborhood? They fly more often so they utilize the airports more they receive more goods so utilize the highway system more. When stuff is freighted around this country it has to end up somewhere. Most of it ends up where the money is. So where ever the money is uses more highway funds. They tend to own more vehicles whether they're boats or planes or cars they need facilities and those facilities are most often government facilities. On and on. They most definitely utilize more of our tax dollars so should pay more back not to mention civic duty or decency.

[snippy]

26. The wealthy do use the services more, but it is more indirect.

Someone who never rides in a car but owns 1 million shares of Federal Express, indirectly uses and benefits from the highway system much more than someone who drives to and from work everyday. Someone who owns 1 million shares of a major hospital corporation, indirectly uses and benefits from Medicare more than most individual Medicare patients treated in one of those hospitals. Someone who owns 1 million shares of a major drug company, indirectly uses the tax credits and research grants it receives and benefits from them more than most individuals who use its drugs. Someone who owns a company which pays such low wages that its employess receive the tax credit for Earned Income, benefits much more than any single one of those employees. These 4 examples easily could provide a wealthy person with a $15 million dollar annual benefit. And examples like these are endless.

[The Night Owl]

12. Republicans are so screwed up...

Republicans think that the homeless have an unfair advantage over everyone because the homeless don't pay for meals.

[welshTerrier2]

14. aaaaarrrrrggggghhhhh !!!!

yup ... when you get to make up the analogy you can make it do all sorts of stupid things ... for starters, just how did your friend come up with his 59% tax bracket?? and what about all the tax loopholes that the poor can never take advantage of ??

here's the problem with the entire scenario ... the issue is not how to divide up the $20 ... the issue is whether the "restaurant" can afford to reduce its prices by $20 ... you see, the restaurant in this example is the government ...

and the U.S. "restaurant" has just run up the largest budget deficits in our nation's history ... tax systems need to be based on an ability-to-pay model ... if a tax cut is warranted to help those who really need help, then so be it ... the entire $20 should go to those in the greatest need ...

we have more than 43 million people who cannot afford healthcare ... your friend's mathematical argument about how to allocate the $20 ignores the fundamental premise that the wealthier patrons are already able to fund their own basic human necessities ... it is not a family value to put poor people in a situation where they, and their children, may die due to lack of adequate medical care ...

and there are numerous programs that critically impact the quality of life in our country and threaten the future of the U.S. ... we are already seeing high paid math and science jobs being exported to "third world" nations ... our education system is badly in need of additional funds ... perhaps the U.S. is well on its way to becoming a third world nation for many sectors of our population ... "no child left behind" just had its funding cut by $6 billion ... and your friend wants to give money from the Treasury back to fancy restaurant patrons ??!!

the problem with your friend's analogy is that it fails to recognize the critical financial mess our country is in ... he's so busy dining out that he probably hasn't had time to read the newspaper ...

[laura888]

15. excellent points - I also think the issue IS whether we can afford cuts...

...not who's getting them.

[apsuman]

17. 59%

To answer one of your questions

I think the analogy is trying to say that the top 10% pay 59% of all income taxes...

[welshTerrier2]

23. well then

that's sort of another problem with the analogy, isn't it ???

the focus is put on percentage of taxes paid rather than the income tax rate ... so, the rich customer is paying $59 of every hundred ... but this $59 might well represent less than one percent of his income ... while another customer who pays, say $10, might be paying 15 percent of his income ...

while it's true we have a graduated tax system, there are far too many examples of the wealthy not paying their fair share of the tax burden ... powerful lobbyists for the wealthy are able to build in all sorts of "special deals" into the tax code ...

anyway, my main point was that the entire analogy is nonsense ... it fails to acknowledge the devastating effects a republican controlled government has had on the financial stability of our county ...

[apsuman]

27. I really hate having to say this...

(so read the whole post before you flame me.)

The little dinner story is an accurate representation of our federal income tax system. The richest pay the greatest percentage of federal taxes. Thus, any income tax cut will have to impact the rich more then the less rich simply because there are a lot of middle income people that pay very very little (percentage wise) in federal income taxes, and below a certain point there are working people that just do not pay any significant percentage of their income in federal taxes. Finally, since in this example lowering the tax rates for everyone means that even more of the middle income makers are essentially removed from the federal income tax rolls, then the rich(er) are left with even a greater percentage of the overall tax burden.

The story does not go into how those four guys that pay nothing in income taxes but are still hit by payroll taxes. Nor does it point out that the rich guy might very well have income that is not payroll and thus not taxed in that way.

The story also does not address if the restaurant owner can afford to lower the bill by $20.

[Stargleamer]

18. I am pretty sure that

this ten-men-at-a-dinner-table parable has been posted and responded to here at DU at least once before. If you have the search capacity, maybe you can find it.

One wonders why the typical liberal in conservative thought is often a college professor--probably one teaching liberal studies! (See Mallard Fillmore). Who really is the typical liberal in this country?

So is the moral of the parable is that when the rich get a unfair tax reduction and we complain about it (note the parable uses the hyperbolic "beat the rich up") they're liable to pack up their marbles and leave the country? Has this ever happened? Where are they to move to? In many European countries they'd get taxed more. Bermuda perhaps? but how could they continue to make their largess overseas?

Note that this parable confuses what is being complained about--the lowering of the wealthy's percentage tax rate. In the parable, the wealthy man's percentage "tax" rate actually increases--from $59 out of $100 (59%) to $52 out of $80 (65%). When people complain about the wealthy getting unfair tax breaks I think they're talking about percentage rates--the percentage tax rate of the wealthy has decreased over the years especially under Republican presidencies. But why should they leave given that complaints haven't prevented their rates from falling from all-time highs (during the 1950's I think) to their current level?

Could they really be more richer in another country? How long would it last?

Here is a reply that occurred to me:

So after the rich tenth man emigrated to live overseas, the other nine put the bill on their tab or paid by credit card, then went over to the rich man's factory (where they all worked), used the concept of "eminent domain" to declare it no longer belonging to the rich tenth man, converted it into a worker's co-operative, and then when they got their next paycheck--which included substantial pay increases for all as the rich tenth man was no longer siphoning off huge amounts--they went back to the restauranteur, paid their tab and gave the restaurant owner a substantial tip.

The marketplace, which would not exist without our Federal government (see Liam Murphy's book, "The Myth of Ownership"), gives the rich their extreme wealth. The Federal government would not exist without taxation. Progressive taxation does not make them no longer rich, but is the price they have to pay for corporate boards and other entities giving them such wealth, to the detriment of others living in this society.

[kentuck]

20. How did the man get rich?

Those other 10 men worked for him. By their labor, they build huge buildings with their bare hands. He paid them minimum wage all those years they were working for him. Each building that they would build, he would sell and make a humongous profit on the building.

After several years, he was a multi-millionaire and his workers were still working for minimum wage. One day he takes them all out to lunch. The bill comes back and it is $100. The boss pays the entire bill because he knows he would be worth nothing if they had not agreed to work for him all those years for minimum wage.

But now he was a multi-millionaire and he realized that labor creates all wealth. Abraham Lincoln was correct. Without labor, there would be no capital. The businessman smiled as he walked out of the restaurant because he knew he was getting over like a fat rat.

[Cat Atomic]

21. Where do these stupid stories come from?

They're obviously never describing something that actually happened. It's like that lame story that was going around on the lead-up to the Iraq invasion, with the dad telling his son about "what if the neighbor was being beaten up- wouldn't we have to run in and help them?".

Personally, I think this shit comes from think tanks.

[EV1Ltimm]

22. poor rich people...

always getting beat up by roving bands of rich people for doing nothing but being rich.

He tries to show some generosity by having lunch with the lower class and it appears that the only thing on the menu for him is a knuckle sandwich. What is a rich person to do?

We need to start a foundation... no... a TELETHON! Save the Rich People telethon! Let's bring some awareness to their plight and make a change for the better. It's the least we can do.

[jmowreader]

24. The Ten Men: The Real Story

//This has been posted to my blog for years; it is at http://www.verybigdesign.com/jmowreader if you're interested...//

By now, we all know the ten-men metaphor Hannity has been using to sneer at liberals' objections to tax cuts on the rich.

Sean Hannity being a right-winger and an admitted fascist, he tends to leave out a few things. Here's the whole story:

Every night, a group of ten friends met for dinner. They'd served together on the USS Forrestal in Vietnam, so no one thought it unusual that four schoolteachers, a garbage truck driver, a machinist, a plumber, a chiropractor, a lawyer and the president of the bank dined at the same restaurant every night.

Because teachers don't make as much as garbage truck drivers, who don't make as much as chiropractors, and because the restaurant's owner was also a Vietnam veteran, a special selection was prepared just for these men.

The schoolteachers each received a pizza and a soft drink for free
The garbage truck driver got a bacon cheeseburger and a beer for $1
The machinist ate chef's salad and a glass of white wine for $3
The plumber got a sirloin steak, baked potato and a glass of the house red wine for $7
The chiropractor had steak and shrimp, steak fries and a bottle of the house red for $12
The lawyer ate prime rib with a well-dressed baked potato and a bottle of French wine for $18
The bank president had veal cordon bleu, two lobster tails, chilled vegetable appetizer, three fine brandies, a bottle of the finest white wine in the cellar and a Punch After Dinner cigar for $59.

Everyone was happy as hell. The schoolteachers loved pizza (and loved the fact that it was free even more), the plumber thought seven dollars for a steak dinner was more than fair, and none of the other nine could figure out how the bank president managed to eat that much food every night.

Coincidentally, the total bill came to $100.

Now, while all this was going on, the restaurant's management noticed something: People thought that if the bank president ate at the same restaurant every night, it must be an excellent one--and the restaurant's sales soared. We must do something for this man!

They fiddled with his menu a bit; now he receives escargots for his appetizer course, a Caesar salad prepared tableside and instead of a Punch After Dinner cigar, he's lighting up a genuine Cohiba Esplendido, rolled on the thigh of a Cuban virgin and smuggled into the United States at great risk and expense. Also, his bill has been reduced by seven dollars.

The owner walked into the office and asked what his maitre 'd and executive chef were doing. When he found out, he was furious. "I'm a brownwater sailor! If it weren't for those ten men, I wouldn't be here today. Cut their total bill to $80!"

Well, let's see...we reduced his bill by seven dollars and ran up his food cost by twenty. If we are to break even on these ten sailors, we'll have to play with the food cost on the meals of the other nine.

Hence, the schoolteachers have gone from a whole, freshly made pizza to half a frozen one (and the kind you get at Wal-Mart for a buck apiece, to boot), the garbage truck driver's also getting frozen pizza, the machinist's chef salad has become a "vegan" chef's salad (the meat, eggs and cheese have been removed from the recipe), the plumber's steak is now as tough as the soles of his combat boots, shrimp has become a memory for the chiropractor and the "well-dressed" part of the lawyer's baked potato is now a lump of the cheapest margarine they can find.

As the other nine watch the waiter whisking and tossing the bank president's Caesar salad, they look at their suddenly diminished rations and wonder what's up.

The restaurant manager comes out to mollify them. "Men of the Forrestal! You're all receiving a reduction in your bill--well, except for the four schoolteachers who didn't have anywhere else to go. The total bill's now $80! Doesn't that make you feel good?" The garbage truck driver holds up his hunk of frozen pizza. "I liked what I had before. If I pay you a dollar can I have my burger back?" 'No, that's not the way the cut works." The same response answered the request for little hunks of meat for the machinist's salad, a meat tenderizing hammer for the plumber's boot-sole steak and some sour cream for the lawyer's potato.

It was nine carrier sailors against one riverine warrior; the nine won in the end. With his arm twisted behind his back, the owner admits to shortchanging everyone so he'd still make a little profit after giving the bank president such a huge reward for making his business so successful.

The nine took action. They grab their former friend, beat him until he's in critical condition, and throw him through the front window.

Things are never the same at the restaurant after that. Now that the bank president no longer eats at this restaurant, diners are eating at the hospital's cafeteria. (If the bank president eats there every day, mainly because they won't let him leave until all 212 of the bones his buddies broke heal, it must be a good place.) Within a few months, the restaurant fails and is sold--to the nine blue-water sailors who threw the bank president out the window. Their first acts are to change the name to "The Nine Swabbies Grill," to post a sign in the window reading "no dogs or bank presidents allowed," and to throw away all of the frozen pizza.

Business is good now at The Nine Swabbies. After all, if the bank president used to eat there, it must be a good place.

[ComerPerro]

25. Ok, lets put it this way

Lets assume that the people who regularly pay $3 for the meal usually only eat $2 worth of food, get none of the "credit" back, and have to pay their $3 whether they have any food at all or not. Even if they don't eat that day, they still pay their $3.

Lets also pretend that the man who pays $59 knows the owner, and usually only actually puts in $20....


Fuck it. Its stupid, its arbitrary, it doesn't address the issues, it oversimplifies, it deliberately ignores the sublte complexities...

Its a FReepers' dream analogy.

I am sorry, but the rich are not noble patriots for paying their taxes. Fuck them, and even more, fuck anyone who whores themselves out to them to try and win their favor.