This really does a good job in explaining the tax situations between the Republican and Democrat tax plans
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For those complaining that Bush's tax reductions "only favor the rich":

How Taxes Work....


They understand this stuff in South Dakota.
Shouldn't they be able to understand it in Washington D.C.?


A straightforward look at taxes from an Accounting Professor at The University of South Dakota:

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. 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 $7;
The eighth $12;
The ninth $18;
The tenth man (the richest) would pay $59.


That's what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement until one day, the owner threw them a curve (in tax language a Tax
Cut).

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free.

But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man (who was paying $1) and the sixth man
who was paying $3) would end up being PAID to eat their meal.

So 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 paid $12;
Leaving the tenth man with a bill of $52 instead of his earlier $59.


Each of the six was better off than before. And the first four continued to eat 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, but he, (pointing to the tenth)
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!"

So, 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 a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill!

Imagine that!


And that, boys and girls, journalists and college instructors, is how the 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 anymore.

Where would that leave the rest?

Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straight-forward logic!

I think that's a clever way to explain it out, but it doesn't quite hit the reality of the situation.

First, I don't think the 10 people would ever eat with each other. The first four individuals would be too busy working overtime and trucking between two jobs to bother with the meal...they'd probably end up just eating a sack lunch. The 10th person would be busy eating in a very fine restaurant, where half the time s/he would get his meal free (consider that a 'meal shelter', if you will) while at his table sat 2 senators and a couple of congressmen. They would be discussing further ways in which his corporations could avoid having to pay for their share of the meal money in the future. Of course, s/he would continue to pay an occasional portion of the lobster/filet mignon dinners s/he eats every evening, but that's a great payoff, I would think. Oh yes, let's not forget that this individual most likely inherited much of his/her wealth...a card carrying member of the lucky sperm diner's club.

Oops...let's not forget. This restaurant is deeply in debt, nearly to the tune of its entire annual income per year and growing at a rapid rate. Meanwhile, the restaurant is considering how it will pay for various increased employee benefits and health costs, and potential war on the Arab restaurant across town while at the same time cutting the prices for its filet mignon. Around 25-30 percent of its costs go to paying *interest* on the loans it has procured. Another 25 percent go to paying for security at the restaurant, though most of the security guards are located in other restaurants throughout the city, and a large group of them are surrounding that Arab restaurant, though it poses very little competition to the restaurant.

Then the restaurant needs to learn how to run its business in the black or close the doors. Overcharging the customers is no solution. Customer ten will always have loopholes in which to hide his income and reduce his tax burden. Close the loopholes and set a fair and equitable tax rate and definitely simplify the tax code. That's the only way we will all be treated fairly.

I am certainly far from affluent but it cranks me to hear class-warfare rhetoric as a reason not to reduce my tax burden. I could care less if the rich get a bigger tax break, they pay more! Bottom line- I earn my money and Bill Gates earns his and we deserve to recieve it in our paychecks. The federal government is out of control and any business run in the fashion of the government, as jazz so eloquently illustrated, would be out of business.

Reap, your example was perfect.

#1 - My favorite restaurant went out of business.

#2 - We pay almost 50% of our hard earned income when it is a small business -- count up all the taxes we pay. Remember to double the Social Security. So, instead of bringing home $100 gross, we bring home $50 net. And that's without health insurance.

#3 -- I guess it is good that my favorite restuarant went out of business -- can't afford to eat out anyway.

Is that what it means to be "middle class?"
(Hope Jar did not get off topic.)